NEC reported a big loss for its fiscal year due to falling worldwide Dram prices and weak demand for logic integrated circuits coupled with reduced capital investment in communications equipment by communications companies and corporates in its domestic market.
The Japanese supplier saw revenues fall by 2.9 per cent to 4,759.4 billion Yen, although the inclusion of sales from Packard Bell NEC in the second half of the year boosted turnover somewhat. Net losses were 157.9 billion Yen, following charges related to the restructuring of Packard Bell and other NEC businesses and the devaluation of foreign securities due to the high Yen, compared with profits of 41.3 billion Yen in the year ago period.
The company said in a statement: "During fiscal 1999, Japan's economy saw a freeze in private sector capital investment and a wide scale decrease in consumer spending due to the worsening employment environment, resulting in continued difficult conditions. In world markets, the US economy continued its growth, while Europe encountered an increasing sense of economic slowdown and Asia experienced continued economic difficulties."
Ít added that, while it could not forecast what the business environment would be like in fiscal 2000, it expected sales to grow about 6.1 per cent to 5,050 billion Yen due to demand for systems integration and PC products, and recovering demand in the semiconductor market. It predicted that net income would hit 25 billion Yen as a result of a proposed overhaul of its cost base.
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