Report: NEC to take $US480M six-month loss

Computer giant NEC will be hit with a multibillion-yen loss when the company releases its mid-year fiscal report expected later this month, according to a report in a leading business daily.

Computer giant NEC will be hit with a multibillion-yen loss when the company releases its mid-year fiscal report expected later this month, according to a report in a leading business daily.

Japan's largest PC maker will post a 50 billion yen ($US480 million) loss for the period spanning March 31 to Sept. 30, 1999, the first half of the company's fiscal year, said a report in today's Nikkei Shimbun paper.

A spokesman at NEC called the report of the loss an "estimate" and said that his company is not confirming any first-half results at this time. NEC is expected to make a statement on its business performance either at the end of this month or the beginning of October.

Today's report follows hard on the heels of news last week which suggested that the Japanese company is planning a major reorganisation, liquidating its NEC Home Electronics subsidiary to focus more on semiconductors, computers and communications equipment.

The NEC spokesman said the company has decided to quadruple its output of 128M-bit DRAM (dynamic random access memory) semiconductors from around 2 million units per month today to 8 million by the end of 2000. The company will also begin production of around 200,000 256M-bit Direct Rambus DRAMs per month by the end of this year, he added.

The decision to ramp up the company's production of high-end memory chips is unrelated to the Nikkei report on NEC's likely earnings, the spokesman said.

NEC had forecast a consolidated group profit of 25 billion yen for this fiscal year, ending March 31, 2000, after losing 157.9 billion yen last fiscal year on revenues of 4.76 trillion yen.

Traders in Tokyo dumped NEC stock on the report of a possible first-half loss. The company's share price plunged 155 yen to close at 2,080 yen, down 6.9 percent, as 10.8 million shares changed hands. NEC's share price is still near a nine-year high, hit last week after investors reacted jubilantly to news of the company's reorganisation.

NEC, based in Tokyo, is at +81-3-3791-6511 or at http://www.nec.co.jp/.

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