Heavy blood loss at NEC

NEC Corp announced in its latest fiscal report that it would cut 10'000 jobs worldwide: in Japan 7'000 positions (incl. external resources) will have to go, Overseas locations will see 3'000 job losses (in accordance with the review of manufacturing operations). The Japanese company warned it would post a net loss of 100 billion yen for the year (ends: March 31, 2012). A stark difference to the forecast 15 billion yen in profit. For the last quarter NEC posted a net loss of 87 billion yen. Under this business environment, NEC recorded consolidated sales of 2,112.2 billion yen for the nine months ended December 31, 2011, a decrease of 77.7 billion yen (-3.5%) year-on-year. This decrease was mainly due to reduced sales from the Personal Solutions business, in spite of increased sales from the Carrier Network business. Regarding profitability, consolidated operating income (loss) improved by 11.0 billion yen year-on-year, to an operating loss of 1.4 billion yen, mainly due to an improved cost percentage and streamlined selling, general and administrative expenses. In terms of ordinary income (loss), NEC recorded a loss of 22.0 billion yen, improving by 27.2 billion yen year-on-year, mainly due to improved operating income (loss) and reduced equity in losses of affiliates. Income (loss) before income taxes and minority interests was a loss of 20.4 billion yen, a year-on-year improvement of 51.8 billion yen. This was primarily due to improved ordinary income (loss) as well as improved extraordinary income from the gain on sales of subsidiaries and affiliates’ stocks. Net income (loss) for the nine months ended December 31, 2011 worsened by 43.9 billion yen year-on-year, to a loss of 97.5 billion yen, mainly due to an increase of income taxes due to the review of deferred tax assets that reflect tax reform and financial forecasts for this fiscal year, in spite of improved income (loss) before income taxes and minority interests.