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.

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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.

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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.

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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.

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

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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.

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