The Nikkei Shimbun published an article today based on an announcement by NEC Corp. (NIPNY) that its fiscal year ended March 31st earnings will be negatively impacted by lower handset sales. Operating profit is expected to be 10 billion yen (US$85m) lower at about 90 billion yen (US$762m), which is 31% lower than last fiscal year. On the contrary, rival Fujitsu Ltd (OTCPK:FJTSY) announced it expects to beat its operating profit estimate by 6 billion yen (US$51m) for a total of 181 billion yen (US$1.5b), a 13% increase over last fiscal year. Goldman Sachs (NYSE:GS) commented today that momentum from Fujitsu's expected earnings is strong and thus it is recommending a switch to NEC since there's more room for an upward revaluation.
NEC's sales are expected to be 100 billion yen (US$847m) lower than its previous projection of 4.93 trillion yen (US$41.8b). Its shipments of handsets have been slow and its PCs manufactured in China and sold in Japan have hurt operating profit due to a weaker yen resulting in higher costs.
NEC's ordinary shares (Tokyo: 6701) finished higher by 0.94% at 863 yen.
Fujitsu's ordinary shares (Tokyo: 6702) gained 1.26% closing at 967 yen. (1 Fujitsu ADR is equal to 5 ordinary shares)
NEC reports earnings on May 11th. Fujitsu hasn't listed its earnings release date yet on its IR site.
NIPNY 1-yr chart:
FJTSY 1-yr chart: