NEC cuts FY 2007 net profit forecast

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NEC Corp said Friday it has lowered its group net profit estimate for fiscal 2007 to 18 billion yen from 30 billion yen as it canceled plans to sell part of its securities holdings due to falling market prices.

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The downward revision also reflects restructuring costs at electronic component-making affiliate NEC Tokin Corp and 7 billion yen of deferred tax asset-related reserves booked by a U.S. affiliate of chipmaking unit NEC Electronics Corp.

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Meanwhile, NEC raised its fiscal 2007 operating profit projection to 150 billion yen from 130 billion yen because of improvements in the profitability of its personal computer and mobile phone businesses.

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Sales in the year that ended in March are now estimated at 4.61 trillion yen, down from the previously forecast 4.7 trillion yen.

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NEC Electronics said the same day that it has cut its fiscal 2007 consolidated sales projection to 685 billion yen from 690 billion yen.

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Operating profit is now forecast at 5 billion yen, compared with the previous break-even estimate, as the company’s cost-cutting efforts paid off and its profit margin improved.

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