Mitsubishi Electric Announces Revised Sales and Earnings Forecasts for Fiscal 1999

Business Wire, Feb 25, 1999

TOKYO--(BUSINESS WIRE)--Feb. 25, 1999--Mitsubishi Electric Corporation today announced revised forecasts for its overall business performance in fiscal 1999 (April 1, 1998-March 31, 1999).

Based on a preliminary analysis of the results of overall operations, Mitsubishi Electric has judged that it will be unable to achieve non-consolidated and consolidated sales and earnings forecasts announced in October and November 1998. The company now predicts to register fiscal year net losses on both a non-consolidated and a consolidated basis. Revised forecasts are as follows: -0-

Revised Forecasts for Fiscal 1999 Non-consolidated Results
                                              (Unit: 100 million yen)

                     Net Sales       Ordinary Profit      Net Income
                                                            (Loss)
Revised Forecast      27,500               50                (900)
Original Forecast     28,000              300                 200
1998 Fiscal Year      28,115               42                (338)


Note: "1998 Fiscal Year" refers to the period between April 1, 1997
and March 31, 1998.


Revised Forecasts for Fiscal 1999 Consolidated Results
                                          (Unit: 100 million yen)

                   Net Sales      Income (Loss) Before     Net Income
                                      Income Taxes           (Loss)
Revised Forecast    37, 000              (800)                (400)
Original Forecast    38,000               300                  200
1998 Fiscal Year     38,013              (525)              (1,059)


Note: "1998 Fiscal Year" refers to the period between April 1, 1997
and March 31, 1998.

Non-consolidated Forecast Revision

Mitsubishi Electric Corporation, the Japanese parent company of the Mitsubishi Electric group, has experienced reduced sales and earnings due mainly to the high value of the yen during the period and a fall in sales of display monitors and semiconductors. In addition, although the company had originally planned to use 80 billion yen in asset sales to cover a special 80 billion yen loss related to the restructuring of operations in the US and other markets, additional restructuring costs from both domestic and overseas operations and obligations to the company's employee pension fund have forced the company to forecast a special loss before income taxes of 160 billion yen. Total restructuring charges for the period are expected to reach approximately 210 billion yen, and the company also plans to contribute about 35 billion yen to the employee pension fund for the accelerated amortization of prior service costs. Please note that the non-consolidated financial results for the period will be reported using Tax Effect Accounting.

Consolidated Forecast Revision

Sales for the Information, Telecommunication, and Electronic Systems and Devices Division, which includes the company's semiconductor, display monitor, and computer operations, were particularly hard hit by the strong yen and are expected to fall by about 60 billion yen. In addition, as a consequence of the severe market conditions in Japan and overseas markets, the Consumer Products Division's sales forecast has been reduced by approximately 20 billion yen. In total, compared with the previous forecast, the consolidated sales forecast has been reduced by 100 billion yen.

Consolidated operating profit (loss), hit by gross profit reductions accompanying the fall in the sales of semiconductors, display monitors, and computers, is forecast to come to a 25 billion yen loss for the period. Due to this operating loss and the special loss registered by the parent company, consolidated income before income taxes is forecast to be a loss of 80 billion yen, while consolidated net income is expected to amount to a 40 billion yen loss.

Dividend

Mitsubishi Electric Corporation plans to issue a dividend of 3 yen per share for the second half of the current fiscal year. The total annual dividend for the previous fiscal year (April 1, 1997 - March 31, 1998) was 4 yen per share. No dividend was issued for the second half of the previous fiscal year.

About Mitsubishi Electric Corporation

With more than 75 years of experience in providing reliable, high-quality products to both corporate clients and general consumers all over the world, Mitsubishi Electric Corporation is a recognized world leader in the manufacture, marketing and sales of electrical and electronic equipment used in information processing and communications, space development and satellite communications, consumer electronics, industrial technology, energy, transportation and construction. With operations in 34 countries, Mitsubishi Electric Corporation recorded consolidated group sales of over US$28 billion in 1998. Additional information on Mitsubishi Electric Corporation is available at www.mitsubishielectric.com.