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NEC Announces Financial Forecast Revisions and Recording of Extraordinary Loss

*** For immediate use April 24, 2014

Tokyo, April 24, 2014 - NEC Corporation today announced revisions to the consolidated financial forecasts announced on January 30, 2014 for the fiscal year ended March 31, 2014 as well as the recording of extraordinary loss.

NEC will announce financial results for the fiscal year ended March 31, 2014 on April 28, 2014.

1. Revised consolidated financial forecasts for the fiscal year ended March 31, 2014

  1. Revised consolidated financial forecasts for the fiscal year ended March 31, 2014 (April 1, 2013 to March 31, 2014)
    (In billions of yen)
     Net SalesOperating income Ordinary income Net income
    Previous Forecast (A) 
    (announced January 30, 2014)
    3,000.0 100.0 70.0 20.0
    Revised Forecast (B) 3,043.0 106.0 69.0 33.0
    Difference (B)-(A) 43.0 6.0 -1.0 13.0
    Change (%) 1.4% 6.0% -1.4% 65.0%
    FY ended March 31, 2013
    3,071.6 114.6 92.0 30.4

  2. Reasons for Financial Forecast Revisions
    NEC forecasts net sales of 3,043.0 billion yen, 43.0 billion yen more than the previous forecast, mainly due to increased sales from the System Platform business, the Telecom Carrier business and the Enterprise business.

    NEC forecasts operating income of 106.0 billion yen, 6.0 billion yen more than the previous forecast, mainly due to increased sales. NEC also forecasts ordinary income of 69.0 billion yen, almost the same as the previous forecast, due to increased non-operating expenses, despite increased operating income. NEC forecasts net income of 33.0 billion yen, 13.0 billion yen more than the previous forecast, mainly due to extraordinary income as a result of gain on sales of subsidiaries and affiliates' stocks.

2. Recording of Extraordinary Loss

As disclosed on October 30, 2013, NEC recorded an extraordinary loss of approximately 14.0 billion yen as business structure improvement expenses for the first half of the fiscal year ended March 31, 2014 (from April 1, 2013 to September 30, 2013) due to a review of the mobile phone handset business conducted by NEC CASIO Mobile Communications, Ltd. In addition to this expense, the following costs are also expected to be recorded, resulting in extraordinary loss from business structure improvement expenses of approximately 25.0 billion yen in the fiscal year ended March 31, 2014.

  1. Costs associated with the liquidation of an NEC CASIO Mobile Communications, Ltd. subsidiary located outside of Japan.
  2. Costs associated with discontinuing new mobile phone development outside of Japan as well as maintenance related costs inside Japan as a result of the review of conventional mobile phone handset business policies.



This material contains forward-looking statements pertaining to strategies, financial targets, technology, products and services, and business performance of NEC Corporation and its consolidated subsidiaries (collectively "NEC"). Written forward-looking statements may appear in other documents that NEC files with stock exchanges or regulatory authorities, such as the Director of the Kanto Finance Bureau, and in reports to shareholders and other communications. NEC is relying on certain safe-harbors for forward-looking statements in making these disclosures. Some of the forward-looking statements can be identified by the use of forward-looking words such as "believes," "expects," "may," "will," "should," "seeks," "intends," "plans," "estimates," "targets," "aims," or "anticipates," or the negative of those words, or other comparable words or phrases. You can also identify forward-looking statements by discussions of strategy, beliefs, plans, targets, or intentions. Forward-looking statements necessarily depend on currently available assumptions, data, or methods that may be incorrect or imprecise and NEC may not be able to realize the results expected by them.

You should not place undue reliance on forward-looking statements, which reflect NEC's analysis and expectations only. Forward-looking statements are not guarantees of future performance and involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Among the factors that could cause actual results to differ materially from such statements include (i) global economic conditions and general economic conditions in NEC's markets, (ii) fluctuating demand for, and competitive pricing pressure on, NEC's products and services, (iii) NEC's ability to continue to win acceptance of NEC's products and services in highly competitive markets, (iv) NEC's ability to expand into foreign markets, such as China, (v) regulatory change and uncertainty and potential legal liability relating to NEC's business and operations, (vi) NEC's ability to restructure, or otherwise adjust, its operations to reflect changing market conditions, (vii) movement of currency exchange rates, particularly the rate between the yen and the U.S. dollar, (viii) the impact of unfavorable conditions or developments, including share price declines, in the equity markets which may result in losses from devaluation of listed securities held by NEC, and (ix) impact of any regulatory action or legal proceeding against NEC. Any forward-looking statements speak only as of the date on which they are made. New risks and uncertainties come up from time to time, and it is impossible for NEC to predict these events or how they may affect NEC. NEC does not undertake any obligation to update or revise any of the forward-looking statements, whether as a result of new information, future events, or otherwise.

The management targets included in this material are not projections, and do not represent management's current estimates of future performance. Rather, they represent targets that management will strive to achieve through the successful implementation of NEC's business strategies.

Finally, NEC cautions you that the statements made in this material are not an offer of securities for sale. Securities may not be offered or sold in any jurisdiction in which required registration is absent or an exemption from registration under the applicable securities laws is not granted.

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