Mitsubishi Electric Cuts Sales, Profit Forecast

Mitsubishi Electric has cut its full-year sales and profits forecast due to anticipated worsening business conditions caused by the global economic slowdown.

The company, which is one of Japan's largest general electrical makers, said it now expects net profits for the April 2008 to March 2009 period to be ¥120 billion (US$1.2 billion), a cut of 24 percent from its previous forecast. Sales are expected to come in at ¥3.9 trillion, which is a 4 percent cut from its previous prediction.

With the previous forecasts Mitsubishi Electric had predicted that sales and profits this year would be roughly equal to those last year so the new forecasts, if realized, mean the company will see its business contract in 2008.

"With the downturn of capital expenditures and decreases in demand for durable appliances arising from the global economic slowdown, business conditions are expected to increase severity for Industrial Automation Systems, Electronic Devices and Home Appliances," the company said in a statement.

The revised forecasts were announced as Mitsubishi Electric disclosed earnings for the April to September period that beat its own estimates. Profits in the half were ¥79 billion, which is a drop of 13 percent on the same period last year by 22 percent higher than the company had been expected. Sales were unchanged at ¥1.9 trillion, which was slightly above the estimate.

The company attributed the better-than-expected profits to strong performance in its home appliances segment and particularly air conditioners as well as its energy and electric systems business.

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