NEC will cut 10,000 jobs after forecasting $1.3 billion annual loss, mostly in mobile phone biz
After releasing a revised financial forecast for FY 2011 that predicts an annual $1.3 billion loss, its third in the last four years, NEC announced it will cut around 10,000 jobs. Bloomberg Businessweek reports President Nobuhiro Endo announced the cuts, revealing most of the cuts will come from the company's mobile-phone handset business, with 7,000 of them expected to be in Japan. The company reportedly had 115,840 employees as of March so there should be a few folks left around to keep the lights on and maintain ventures like its new JV with NTT Docomo, Panasonic, Samsung and Fujitsu, the NEC Lenovo PC alliance, and its recently announced work on the Hayabusa 2 asteroid explorer. Still, we'll have to wait and see how the cuts affect upcoming cellphones, like any potential successors to its super-slim MEDIAS N-04C seen above.
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NEC Announces Financial Forecast Revisions,
Business Restructuring Costs and Dividend Forecast Revisions
*** For immediate use January 26, 2012
Tokyo, January 26, 2012 - NEC Corporation today announced revisions to the consolidated financial forecasts and dividend forecasts announced on October 27, 2011 for the fiscal year ending March 31, 2012 as well as the recording of business restructuring costs.
1. Revised consolidated financial forecasts for the fiscal year ending March 31, 2012
(April 1, 2011 to March 31, 2012)
(In billions of yen)
Sales Operating
income (loss) Ordinary
income (loss) Net income
(loss)
Previous Forecast (A)
(announced October 27, 2011) 3,250.0 90.0 55.0 15.0
Revised Forecast (B) 3,100.0 70.0 35.0 -100.0
Difference (B) - (A) -150.0 -20.0 -20.0 -115.0
Change (%) -4.6% -22.2% -36.4% -
(Reference)
FY ended March 31, 2011 3,115.4 57.8 0.0 -12.5
2. Reasons for Financial Forecast Revisions
As challenging business conditions continue, NEC forecasts sales of 3,100.0 billion yen, 150.0 billion yen less than the previous forecast, mainly due to a decrease in sales in the Carrier Network business as a result of investment restraint in international markets, a decrease in sales from a decline in mobile phone shipments in the Personal Solutions business and the impact of flooding in Thailand on the Platform business.
NEC forecasts operating income of 70.0 billion yen, 20.0 billion yen less than the previous forecast, mainly due to loss from decreased sales in the Personal Solutions business and Platform business. NEC also forecasts ordinary income of 35.0 billion yen, 20.0 billion yen less than the previous forecast, mainly due to worsening operating income (loss).
NEC forecasts net loss of 100.0 billion yen, 115.0 billion yen less than the previous forecast, mainly due to worsening ordinary income (loss), business restructuring costs for the reform of cost structure, and an increase in income taxes due to the review of deferred tax assets that reflect tax reform and financial forecasts for this fiscal year.
3. Extraordinary Loss from Business Restructuring Costs
NEC forecasts extraordinary loss of about 40.0 billion yen for the fiscal year ending March 31, 2012, mainly due to business restructuring costs centered on personnel reductions.
4. Dividend Forecast Revision
Interim Dividend Year-end Dividend Annual Dividend)
Forecast as of October 27, 2011 - Undetermined Undetermined
Revised forecast for FY
ending March 31, 2012 - 0 yen 0 yen
Actual 0 yen - -
(Reference)
FY ended March 31, 2011 0 yen 0 yen 0 yen
5. Reasons for Dividend Forecast Revision
Regrettably, NEC has revised its forecast for year-end dividends for the fiscal year ending March 31, 2012 from undetermined to none, in consideration of the forecast net loss for the fiscal year ending March 31, 2012, and others.
Show full PR text
NEC Announces Financial Forecast Revisions,
Business Restructuring Costs and Dividend Forecast Revisions
*** For immediate use January 26, 2012
Tokyo, January 26, 2012 - NEC Corporation today announced revisions to the consolidated financial forecasts and dividend forecasts announced on October 27, 2011 for the fiscal year ending March 31, 2012 as well as the recording of business restructuring costs.
1. Revised consolidated financial forecasts for the fiscal year ending March 31, 2012
(April 1, 2011 to March 31, 2012)
(In billions of yen)
Sales Operating
income (loss) Ordinary
income (loss) Net income
(loss)
Previous Forecast (A)
(announced October 27, 2011) 3,250.0 90.0 55.0 15.0
Revised Forecast (B) 3,100.0 70.0 35.0 -100.0
Difference (B) - (A) -150.0 -20.0 -20.0 -115.0
Change (%) -4.6% -22.2% -36.4% -
(Reference)
FY ended March 31, 2011 3,115.4 57.8 0.0 -12.5
2. Reasons for Financial Forecast Revisions
As challenging business conditions continue, NEC forecasts sales of 3,100.0 billion yen, 150.0 billion yen less than the previous forecast, mainly due to a decrease in sales in the Carrier Network business as a result of investment restraint in international markets, a decrease in sales from a decline in mobile phone shipments in the Personal Solutions business and the impact of flooding in Thailand on the Platform business.
NEC forecasts operating income of 70.0 billion yen, 20.0 billion yen less than the previous forecast, mainly due to loss from decreased sales in the Personal Solutions business and Platform business. NEC also forecasts ordinary income of 35.0 billion yen, 20.0 billion yen less than the previous forecast, mainly due to worsening operating income (loss).
NEC forecasts net loss of 100.0 billion yen, 115.0 billion yen less than the previous forecast, mainly due to worsening ordinary income (loss), business restructuring costs for the reform of cost structure, and an increase in income taxes due to the review of deferred tax assets that reflect tax reform and financial forecasts for this fiscal year.
3. Extraordinary Loss from Business Restructuring Costs
NEC forecasts extraordinary loss of about 40.0 billion yen for the fiscal year ending March 31, 2012, mainly due to business restructuring costs centered on personnel reductions.
4. Dividend Forecast Revision
Interim Dividend Year-end Dividend Annual Dividend)
Forecast as of October 27, 2011 - Undetermined Undetermined
Revised forecast for FY
ending March 31, 2012 - 0 yen 0 yen
Actual 0 yen - -
(Reference)
FY ended March 31, 2011 0 yen 0 yen 0 yen
5. Reasons for Dividend Forecast Revision
Regrettably, NEC has revised its forecast for year-end dividends for the fiscal year ending March 31, 2012 from undetermined to none, in consideration of the forecast net loss for the fiscal year ending March 31, 2012, and others.
