Feb. 25 (Bloomberg) -- NEC Corp., Japan's largest maker of
personal computers, aims to boost net income 10-fold over three
years by shifting focus toward overseas markets and bolstering
its cloud computing-related businesses.
The company is targeting net income of 100 billion yen
($1.1 billion) on sales of 4 trillion yen in the fiscal year
ending March 31, 2013, Tokyo-based NEC said in a statement today.
Operating profit, or sales minus the cost of goods sold and
administrative expenses, may reach 200 billion yen, it said.
NEC which makes computers, cell phones and electronic parts,
is forecasting 10 billion yen in net income for the current 12
months to March 31, compared with a 297 billion yen loss a year
earlier. The company is in the process of cutting 20,000 jobs
and distancing itself away from its money-losing memory chip
business, which will be merged with Renesas Technology Corp.
from April.
NEC slipped 0.8 percent to close at 241 yen on the Tokyo
Stock Exchange. The benchmark Nikkei 225 Stock Average lost 1
percent.
The company's sales target for the 12 months through March
2013 is less than the 4.2 trillion yen total for the year ended
March 2009, when the company posted an operating loss of 6.2
billion yen. NEC said it aims to increase the share of its
overseas sales to 25 percent of total revenue in fiscal 2012
from the current level of 16 percent.
New President Named
The company earlier today named Nobuhiro Endo president,
effective April 1, replacing Kaoru Yano, who will become
chairman. Endo, 56, oversaw Tokyo-based NEC's wireless
infrastructure business in the three years through March 2009,
during which the company took the top share in the global market
for microwave equipment that links base stations, according to
NEC.
“The core of our business is IT and networking,” Endo
said at a briefing in Tokyo. “Foreign markets are where our
future growth will be.”
NEC joins Fujitsu Ltd., Japan's biggest computer-services
provider, in betting that cloud-computing services will help
spur growth. The company said today it will increase revenue
from the services, which allow companies to cut costs and free
their own servers by storing data and applications online, to 1
trillion yen in fiscal 2012, from the current level of 400
billion yen.
Fujitsu said in December it's targeting cloud computing
sales of 300 billion yen in the three years to March 2012 and
capturing 20 percent of the Japanese market by the 12 months
ending March 2016. Worldwide spending on the services will
almost triple to $42 billion by 2012, according to Framingham,
Massachusetts-based researcher IDC.
NEC will consider buying other businesses in order to add
to its growth, Endo said. “The investments could total as much
100 billion yen,” over the three years to March 2013, he said.
“Where there's a need we'll look for opportunities.”
