NEC falls into red, hit by smartphone exit

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NEC said Wednesday it fell into the red in the six months to September because of lower sales and losses on its exit from the smartphone business.

NEC suffered a net loss of 26.2 billion yen in the first half, after seeing a profit of 8 billion yen the year before.

The figures came after NEC incurred 14.24 billion yen in extraordinary losses as the one-time powerhouse in the mobile sector exited the smartphone business.

NEC had merged its mobile phone handset operations with those of Casio Computer and Hitachi to fight off rising competition. But the subsidiary struggled to succeed in a market increasingly dominated by Apple and South Korean giant Samsung.

NEC said its April-September operating profit dived 99.2% to 379 million yen as sales fell 4.5% to 1.38 billion yen.

It left earnings outlooks unchanged for the full year to March 2014. It expects net profit to fall 34% from the previous year to 20 billion yen, operating profit to drop 13% to 100 billion yen and sales to slip 2.3% to 3 trillion yen.