Restructuring efforts and fresh demand for semiconductors narrowed first-half losses at Japan's Toshiba Corp and pushed NEC Corp back into the black, the firms said yesterday.
The results were better than expected, analysts said, but lingering economic uncertainties forced Toshiba to cut its full-year sales forecast, while NEC left predictions unchanged.
Toshiba's group net loss shrank to ?26.4 billion (US$213 million) in the six months to September from ?123.1 billion a year ago.
Its pre-tax loss narrowed to ?43.8 billion in the six months to September from ?196.6 billion previously, while revenue rose 5 percent to ?2.6 trillion.
"The results reflect solid recovery led by recent initiatives taken by management, including business restructuring and closely focused portfolio management," Toshiba said in a statement.
In April, the firm said it expected ?180 billion in cost reductions in the current fiscal year through 11,000 job cuts and restructuring.
A renewed global appetite for electronic devices also helped shelter Toshiba from the tough operating environment.
"The improvement in earnings in the semiconductor sector and brisk demand for media products is expected to be maintained in the latter half," Toshiba vice president Kiyoaki Shimagami told a news conference.
But weak domestic demand and a prolonged period of deflation in Japan ate into home appliance sales, which declined 5 percent on the year to ?332.7 billion.
Sluggish mobile handset and personal computer sales also hit rival NEC, but a sweeping corporate shake-up helped the company post a group first half net profit of ?1.0 billion from a loss of ?29.9 billion a year earlier.
Its pre-tax profit recovered to ?20.4 billion from a ?34.3 billion loss previously, but revenue slid to ?2.17 trillion from ?2.47 trillion.
"We are on target to achieve ?200 billion in cost cuts in the full year as planned," said NEC senior managing director Shigeo Matsumoto.
Last year, the firm shed 16,000 jobs worldwide mostly in the semiconductor division in a frantic bid to turn around its loss-making operations.
As a result, losses from affiliated semiconductor firms fell by ?1.7 billion over April to September to ?9.8 billion.
Looking ahead, the firms said they hoped to counter economic risk by releasing new products and concentrating on key markets.
"We plan to release new high-end products with image-processing and wireless functions.
"The company is betting our second-half performance on the Christmas shopping season," Shimagami told reporters.
Toshiba left its full-year net profit forecast unchanged at ?23 billion on a pre-tax profit of ?40 billion.
But its full year revenue was lowered ?200 billion to ?5,650 billion due to a possible slump in demand for mobile phones and home appliances.
NEC hoped to make its PC arm more profitable in the second half through cost cuts and increased exports to China, said Matsumoto.
The firm will also increase capital spending for the full year on its semiconductor division to ?48.5 billion from ?32 billion seen earlier, though overall expenditure would remain the same.
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