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Mitsubishi Electric slashes full-year forecasts

Mitsubishi Electric has revised downwards its financial forecasts for the current year, blaming stalled demand for IT products.

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Mitsubishi Electric has revised downwards its financial forecasts for the current year, blaming stalled demand for IT products.

The company cut its full-year sales forecast for the period to the end of March 2002 by 9.3%, to 3.9 trillion yen (£22bn). It also cut its pre-tax income forecast from a 120bn yen profit to a 20bn yen loss, and said it now expects net income to be 2bn yen against a previous forecast of 75bn yen.

The profitability outlook at some of the company's operations is holding steady but worsening at other divisions. The electronic devices and information and communication systems divisions - and particularly the semiconductor and mobile phone handset units - are in the latter category, the company said.

In addition to the downgrade, the company also said it plans to close its North American unit, Mitsubishi Wireless Communications, on 31 March 2002, with the loss of 155 jobs. The company's Japanese and European units will take over development and supply of mobile phone handsets for the US.

Mitsubishi Electric is the last of Japan's big five semiconductor and electronics makers to disclose such a downgrade or restructuring.

The first were made in late July when NEC and Fujitsu announced revisions to their earnings outlooks and restructuring plans. Toshiba followed with the announcement of an earnings revision and plans to cut 18,800 jobs in mid-August, and by the end of August Hitachi had made a similar move, announcing 14,700 job cuts across the company.

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