SCIENCE

TOKYO, JAPAN -- NEC Corporation (Nasdaq: NIPNY) will begin releasing quarterly consolidated financial results starting this fiscal year. NEC will continue to disclose semi-annual and annual financial results and forecast information in accordance with the Tokyo Stock Exchange disclosure rules. NEC will release quarterly financial results in order to support a global standard of disclosure and to meet shareholders' and investors' demands for more timely and transparent disclosure of information. Consolidated net sales for the first three months ended June 30, 2001 increased by Yen 62.3 billion, or 6%, to Yen 1,124.6 billion, over net sales for the previous first three months ended June 30, 2000. Income before income taxes was approximately Yen 3.3 billion, an increase of Yen 0.1 billion compared to the corresponding period last year. Net sales of NEC increased overall, despite a decrease in net sales of NEC Electron Devices due to slowdown in the personal computer (PC) market. The increase in NEC's net sales resulted from an increase in net sales of NEC Solutions resulting from steady domestic IT investments, and an increase in net sales of NEC Networks resulting from a strong domestic demand for mobile phones. Operating income for NEC increased because NEC Networks increased its segment profit significantly due to an increase in sales and continued cost reductions and because segment profit for NEC Solutions increased due to continued cost reductions and restructurings. NEC Electron Devices recorded a loss, however, amidst a slowdown in the PC market in the United States and the continual fall in prices of memories and liquid crystal displays (LCDs), a downward trend that started in the second half of the previous fiscal year. Although income before income tax for the three months ended June 30, 2001 remained approximately the same as in the corresponding period last year due to a decrease in restructuring expenses, net income for the current period was Yen 0.8 billion, a decrease of Yen 2.1 billion over the corresponding period last year. This decrease was principally due to a decrease in equity in earnings of affiliated companies and the cumulative effect of accounting change from the application of new accounting standards regarding derivatives and hedge activity. Net income per share before the cumulative effect of accounting change in the three months ended June 30, 2001 was Yen 2.07, in comparison to Yen 1.85 per share in the comparable period in the prior fiscal year.