NEC May Post Losses at Telecom-Gear Unit Until Sept. (Update1)
By Minoru Matsutani and Yoshifumi Takemoto
02/24 22:21
quote.bloomberg.com
Tokyo, Feb. 25 (Bloomberg) -- NEC Corp., whose shares are the second-worst performing on the Nikkei 225 stock average this year, said its communications equipment unit may post losses until the end of September as telephone network operators curtail spending.
``It will be difficult to post a profit in the January to March period,'' Mineo Sugiyama, a senior executive vice president at NEC, Japan's largest telecommunications-equipment maker, said in an interview. ``The bottom will be in the second half (the six months ending March 2003).''
NEC counts among its customers companies such as Nippon Telegraph & Telephone Corp., NTT DoCoMo Inc. and AT&T Corp., all of which have a glut of equipment, Sugiyama said. Investors are concerned NEC, whose semiconductor business is already recording losses, will have difficulty returning to profit after projecting a record $2.25 billion loss this fiscal year.
The declining fortunes of the unit means that ``basically, NEC has no core businesses,'' said Hideki Kamiya, who manages 10 billion yen ($75 million) at Asahi Tokyo Investment Trust Management Co., which holds NEC shares. ``Carriers don't have money. I'm not sure whether the telecom-equipment business can be a core business for NEC.''
NEC will have difficulty generating profit in a market where the biggest player, Nortel Networks Corp., has posted losses for eight straight quarters, Kamiya said. |
