Mitsubishi posts net loss for second year running

Mitsubishi posts net loss for second year running

Mitsubishi Electric remained in the red for the second year in a row, posting a slightly higher-than-expected net loss of 44.5 billion yen ($US364 million) for its fiscal 1999, ended March 31 1999, the company announced last week.

The Japanese vendor said that falling domestic consumption and sluggish economies in Asia as a whole restrained orders, pushing sales down for the first time in four years to 3.79 trillion yen.

The results were in line with expectations. Mitsubishi Electric said in February that it expected to lose 40 billion yen for the fiscal year. In the previous fiscal year, the vendor reported a 105.9 billion yen net loss. Mitsubishi Electric's profits have been falling since 1996, according to a company spokesman.

Based in Tokyo, Mitsubishi Electric is one of Japan's largest makers of satellites and mobile telephones. In addition, the company is a major producer of memory chips.

In addition to economic factors, the company is absorbing the costs of a massive restructuring of its semiconductor and PC-related businesses. The restructuring of those segments, announced at the end of March, combined with weak sales led to a 98.1 billion yen operating loss in its information, telecommunications and electronic systems and devices division. Similar factors were behind a 4.4 billion yen operating loss in its consumer products group, the company said.

Over the past four years, Japan's electronics makers have been hit hard by a broad price collapse in semiconductors, particularly those used as the main memory in PCs. Fujitsu, Hitachi, and now Mitsubishi Electric have seen profits evaporate as DRAM (dynamic random access memory) chip prices have plunged. Chip and computer maker NEC also announced a net loss of 158 billion yen.

Mitsubishi Electric's profits were also restrained by a one-time 35 billion yen payment to its pension fund, according to a spokesman at the company.

The Japanese vendor said in March that it was embarking on a three-year effort to return to profitability by fiscal 2002. The company is forecasting 5 billion yen in consolidated profits on 2.7 trillion yen of sales for its fiscal 2000, which ends March 31, 2000.

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