NEC Posts Increased First-Half Loss

NEC Corp., losing share to Sharp Corp. and Toshiba Corp. in Japan’s mobile-phone market, said its first- half loss widened fivefold because of a slump in sales. Shares of NEC have slid 35 percent since this year’s peak in April as Toshiba overtook the company in handset sales in the fiscal first-half. NEC today cut its mobile phone shipment target by 33 percent and said the business will post a 48 billion yen operating loss this fiscal year, instead of a previously forecast for a 15 billion yen loss.

The company today said it will ship 6 million handsets globally this fiscal year, instead of the 9 million it said in July, as NEC cuts its product lineup in China. The company is also in talks with Matsushita Electric Industrial Co. to share costs to make handset components.

“The projected loss at mobile phones is because of costs” from getting rid of inventories in China, Yasuo Matoi, an NEC vice president, told reporters at a Tokyo news conference today. “There won’t be another cost next fiscal year. We will definitely post a profit.”

NEC, which had been the biggest phone maker in Japan for the past four years, slid to third place in the first six months of 2006 with a 10.7 percent share of shipments, according to MM Research Institute. Sharp had 19.3 percent of the market, followed by Toshiba’s 12.3 percent. More from Bloomberg.