SAN JOSE, Calif. Fujitsu, Matsushita and NEC on Thursday (Oct. 28) posted strong results for the first half of 2004, but the Japanese electronics giants lowered their respective outlooks due to a slowdown in semiconductors and other products.
Perhaps the exception to the rule in Japan is Hitachi Ltd. (Tokyo), which recently raised its fiscal guidance for the first half of fiscal 2004 ended September 30. The company cited an improving economy and demand for IT and consumer products (see Oct. 22 story).
Still, the mood is becoming gloomy in Japan. NEC Corp. (Tokyo) reported a net profit of 4.25 billion yen (US$40 million) for the third quarter, down from 14.8 billion yen (US$139.3 million) a year ago. Sales for the quarter were 1.252 trillion yen (US$11.8 billion), down about 1 percent from the like period a year ago.
NEC lowered its full fiscal year forecast amid a slowdown in semiconductors and mobile phones. It now expects to report a net profit of 60 billion yen (US$564 million) for the year ending March 31, 2005, down from 70 billion (US$658 million). It also reduced its sales projection by 40 billion yen (US$376 million) to 4.9 trillion yen (US$46 billion).
Sales for NEC's Electron Devices business for the first half of the fiscal year ending March 31, 2005 amounted to 461.3 billion yen (US$4.3 billion), flat from the like period a year ago.
The unit makes semiconductors and flat-panel displays. Chip sales increased 5 percent in the period, while flat-panel displas fell 10 percent, according to NEC.
Fujitsu Ltd. (Tokyo) reported consolidated net sales of 2.22 billion yen (US$20.182 million) for the first half of fiscal 2004, which runs from April 1- Sept. 30, 2004), an increase of 3.6 percent over the same period last year.
Consolidated operating income for the first half was 33.2 billion yen (US$303 million), rebounding by 51.2 billion yen (US$481.9 million) from the operating loss recorded in the first half of fiscal 2003.
Fujitsu recorded a 3.6 billion yen (US$33 million) net profit for the second quarter, its first second-quarter net profit since fiscal 2000. However, this was not enough to offset the net loss in the first quarter, and Fujitsu reported a first-half consolidated net loss of 8.1 billion yen (US$74 million), a major improvement of 50.4 billion yen (US$474.4 million) over the first half of fiscal 2003.
Double-digit sales increases in system chips, 3G mobile phone base stations, and hard disk drives were offset by lower than expected sales of mobile phone handsets and solutions and systems integration services.
First-half net sales in the Electronic Devices segment jumped 17.6 percent over the prior year, to 393.5 billion yen (US$3,577 million), driven by continued strong demand for system chips used in digital AV equipment. Operating income in the segment was 34.5 billion yen (US$314 million), rebounding by 35.7 billion yen (US$336.1 million) from the narrow loss posted in the previous year.
"We're continuing the momentum of our corporate-wide turnaround, with profitability now restored in all three major business segments as well as in each of our principal geographies," said Fujitsu president Hiroaki Kurokawa, in a statement. "Although market uncertainties and price competition make it difficult to achieve substantial sales growth in the current environment, we are determined to continue to drive down costs to achieve solid bottom-line performance."
In anticipation of a second-half downturn in the markets for certain products, including semiconductors, displays, and mobile phones, Fujitsu has lowered its fiscal 2004 full-year consolidated net sales, according to the company.
Matsushita Electric Industrial Co., Ltd. (Tokyo) said consolidated group sales for the second quarter increased 18 percent to 2,216.5 billion yen (US$19.97 billion). Net income for the second quarter totaled 23.4 billion yen (US$210 million), up 14 percent a year ago.
Sales of components and devices were up 4 percent to 582.5 billion yen (US$5.25 billion).
"Regarding the business environment for the second half of fiscal 2005, the company currently expects to encounter severe conditions, such as wide-spreading concern for slower economic growth in Japan and the United States, ever intensifying global price competition, and increasing oil prices," according to the consumer-electronic powerhouse.
Considering these conditions, however, Matsushita has not changed its previous forecast for the full fiscal year 2005.