NEC warns on profits, cuts jobs


NEC makes computers as well as chips, and does 20 percent of its business outside of Japan

TOKYO, Japan -- Chipmaker NEC Corp. on Thursday followed rivals Toshiba and Fujitsu in warning on earnings.

NEC posted a net loss of 155.0 billion yen ($1.17 billion) for the third quarter. That's a huge drop from an 8.3 billion yen profit for the same period in 2000.

It forecast a net loss of 300 billion yen ($2.3 billion) for the full fiscal year through March.

NEC is Japan's second-largest chipmaker, behind only Toshiba, and both companies also make computers.

It is also slashing jobs, a move that chipmaker Hitachi made on Wednesday.

NEC will cut 14,000 jobs this business year, which runs through March 2002. It had already stated it would cut 4,000 jobs.

Japanese companies are in the season for third-quarter earnings, since the business year runs through March in Japan.

For the third quarter, through December, NEC had sales of 1.125 trillion yen ($8.48 billion). That was down 9.5 percent from the same period the year before.


NEC's profit warning comes after Toshiba and Fujitsu both warned earlier this week

Together with the first two quarters, NEC has posted sales of 3.59 trillion yen ($27.0 billion) for the first nine months of the fiscal year, down 3.4 percent from 2000.

The job cuts this year are around 9.3 percent of NEC's total work force of 150,000.

NEC stock fell 0.76 percent to 1,050 yen on Thursday, on a day the technology-oriented Nikkei index rose 0.79 percent to end at 9,997.80.

NEC was the only major technology company reporting earnings on Thursday in Japan. But it announced its earnings after the bell. It is also traded on Nasdaq in the United States.

Tokyo-based NEC gets around 20 percent of its sales outside of Japan.