Mitsubishi Electric Announces Consolidated Financial Results for the Third Quarter of Fiscal 2008

Mitsubishi Electric Corporation (President and CEO: Setsuhiro Shimomura) announced today its financial results for the third quarter, ending December 31, 2007, of the current fiscal year ending March 31, 2008 (fiscal 2008).

Fiscal 2008, 3rd Quarter Consolidated Financial Results

Net sales:

 

911.9 billion yen

 

(5% increase from same quarter last year)

Operating income:

63.8 billion yen

(Unchanged from same quarter last year)

Income before income taxes:

57.9 billion yen

(11% decrease from same quarter last year)

Net income:

42.3 billion yen

(Unchanged from same quarter last year)

The business environment during the third quarter of fiscal 2008 saw general strengthening undertones in the global economy with continued strength mainly in China and other strong economies, despite a globally increasing financial uncertainty due to subprime loan related issues, in addition to a stronger sense of stagnation in the U.S.A. The Japanese economy as well saw general steady development based mainly on overseas demand, despite deferred construction of buildings caused by revision of building standards law.

Under these circumstances, third quarter net sales rose 5% compared to the same period of the previous fiscal year to 911.9 billion yen due to increased revenue in the Energy and Electric Systems, Industrial Automation Systems and Home Appliances segments. Despite decreased profit in the Information and Communication Systems segment compared to the same quarter last year, operating income was 63.8 billion yen, on par with the same quarter last year due to increased profit in the Industrial Automation Systems and Home Appliances segments.

While income before income taxes decreased by 11% compared to the same quarter last year to 57.9 billion yen due to losses involving sale of subsidiaries’ stocks and etc, net income was 42.3 billion yen, on par with the same quarter last year, due to both decreases in income taxes and improvement of investment profit in equity method companies.

Consolidated Financial Results by Business Segment

Energy and Electric Systems

Total sales:

 

216.2 billion yen

 

(6% increase from same quarter last year)

Operating income:

13.6 billion yen

(1.2 billion yen decrease from same quarter last year)

The social infrastructure systems business saw increases in sales from the same quarter last year due to expansions in the electric equipment for rolling stock business, despite a decrease in orders from the same quarter last year due to decreases in large overseas orders in the power generation business.

Building system business experienced increases in both orders and sales from the same quarter last year due to increases of elevators and escalators in large domestic metropolitan projects as well as increases in initiatives in the Middle East and India.

As a result, total sales for this segment increased by 6% from the same quarter last year, and operating income decreased by 1.2 billion yen from the same quarter last year due to fluctuant natures among sales orders, etc.

Industrial Automation Systems

Total sales:

 

255.8 billion yen

 

(8% increase from same quarter last year)

Operating income:

39.8 billion yen

(2.3 billion yen increase from same quarter last year)

Factory automation systems business experienced increases in both orders and sales from the same quarter last year, upheld by buoyant demands for domestic factory automation machinery and active capital investments in China and other overseas markets.

The automotive equipment business saw increases in both orders and sales from the same quarter last year due to strong development in global production of Japanese multinational automotive manufacturers.

As a result, total sales for this segment increased by 8% compared to the same quarter last year. Operating income rose by 2.3 billion yen compared to the same quarter last year due to increase in sales, etc.

Information and Communication Systems

Total sales:

 

129.6 billion yen

 

(7% decrease from same quarter last year)

Operating income (loss):

(1.1 billion yen)

(6.0 billion yen worse from same quarter last year)

The telecommunications equipment business saw decreases in both orders and sales from the same period of the previous fiscal year due to decreases in mobile handsets.

The information system service business saw an increase in sales from the same period of the previous fiscal year due to expansions in the system integration business and the IT infrastructure service business, etc.

The electronic systems business saw decreases in both sales and orders from the same period last year due to a decrease in satellite-related business, etc.

As a result, total sales for this segment showed a decrease of 7% from the same period last year. Operating income was 6.0 billion yen worse from the same period last year due to decreases in sales of mobile handsets, etc.

Electronic Devices

Total sales:

 

47.7 billion yen

 

(4% increase from same quarter last year)

Operating income:

2.8 billion yen

(0.1 billion yen increase from same quarter last year)

The semiconductor business saw increases in both orders and sales from the same quarter last year due to increases in orders for power modules for industrial machinery and consumer use mainly for air conditioners and red laser diodes for recordable DVD players, etc.

The liquid crystal business saw an increase in orders from the same quarter last year due to increases in industrial and consumer use products, despite a decrease in sales from the same quarter last year due to decreases in products for use in amusement facilities.

As a result, total sales for this segment increased by 4% from the same quarter of the previous fiscal year. Operating income increased by 0.1 billion yen from the same quarter of the previous fiscal year due to increased sales, etc.

Home Appliances

Total sales:

 

229.2 billion yen

 

(9% increase from same quarter last year)

Operating income:

15.1 billion yen

(4.9 billion yen increase from same quarter last year)

The home appliance business saw a 9% increase in sales from the same quarter last year due to increases in air conditioners and solar power generation systems for the overseas market, etc.

Operating income increased by 4.9 billion yen from the same quarter last year due to increased sales, etc.

Others

Total sales:

 

160.5 billion yen

 

(5% increase from same quarter last year)

Operating income:

3.3 billion yen

(Unchanged from same quarter last year)

Sales increased by 5% from the same quarter last year mainly in our affiliated companies involved in such activities as material procurement and engineering, etc. Operating income was unchanged from the same quarter last year.

Fiscal 2008, First 9 Months Consolidated Financial Results

Net sales:

 

2,801.6 billion yen

 

(5% increase from same quarter last year)

Operating income:

193.0 billion yen

(23% increase from same quarter last year)

Income before income taxes:

187.5 billion yen

(27% increase from same quarter last year)

Net income:

133.9 billion yen

(36% increase from same quarter last year)

Consolidated net sales for the first 9 months of fiscal 2008 rose 5% compared to the same period of the previous fiscal year to 2,801.6 billion yen due to increased revenue in the Energy and Electric Systems, Industrial Automation Systems and Home Appliances segments, etc. Operating income increased 23% from the same period last year to 193.0 billion yen due to increased profit in the Energy and Electric Systems and Home Appliances segments, etc.

Income before income taxes increased 27% compared to the same period last year to 187.5 billion yen and net income increased 36% compared to the same period last year to 133.9 billion yen.

Financial Standing

Assets, Liabilities, and Shareholders’ Equity

The company’s total assets increased from the end of the previous fiscal year by 66.9 billion yen to 3,519.1 billion yen. While accounts receivables decreased by 114.8 billion yen due to accelerated collection of our credits, inventory increased by 179.5 billion yen due to increase in unrealized sales, etc.

The balance of outstanding debts increased by 1.5 billion yen from the end of the previous fiscal year to 642.6 billion yen, with a reduction of its ratio to total assets down to 18.3% (an improvement by 0.3 point compared to the end of the previous fiscal year). Trade payables also decreased by 30.3 billion yen, while retirement and severance benefits increased by 33.2 billion yen due to an increase in deficiency of pension funds, etc. brought on by a decline in stock price, etc.

Shareholders’ equity increased by 56.9 billion yen compared to the previous fiscal year to 1,116.1 billion yen, with an improvement in ratio of shareholders’ equity to total assets of 1.0 point compared to the previous fiscal year to 31.7%. Retained earnings increased by 108.1 billion yen due to a 133.9 billion yen net income and a dividend payment of 25.7 billion yen. Accumulated other comprehensive income decreased by 51.1 billion yen due to a decline in stock prices, etc.

Cash Flow

Free cash flow increased by 10.8 billion yen compared to the same quarter of the previous fiscal year to 66.1 billion yen (outflow) owing to the decrease in cash flows from operating activities. Cash flows from financing activities were 42.0 billion yen (inflow) resulting from debt procurement and dividend payment.

Cash flows from operating activities for the first 9 months of fiscal 2008 decreased by 30.3 billion yen compared to the same period of the previous fiscal year to 98.9 billion yen (inflow) due to an increase in inventories, despite an increase in net income. Cash flows from investing activities for the first 9 months of fiscal 2008 decreased by 25.0 billion yen compared to the same period of the previous fiscal year to 86.9 billion yen (outflow) due to decreases in loan receivables, etc. Consequently, free cash flow reached revenues of 11.9 billion yen. Cash flows from financing activities were 23.6 billion yen (outflow) due to dividend payment, etc.

Forecast for Fiscal 2008 (ending March 31, 2008)

Net sales:

 

3,970 billion yen

 

(3% increase year-on-year)

Operating income:

233 billion yen

(Unchanged year-on-year)

Income before income taxes:

210 billion yen

(14% increase year-on-year)

Net income:

148 billion yen

(20% increase year-on-year)

A sense of financial uncertainty is getting obvious globally from the outset of the year. Under such circumstances, the forecast for fiscal 2008 might be assessed along with the ongoing planning for the following fiscal year, and therefore remains currently unchanged from that stated on October 29, 2007, announced with the Half-Year Results.

Note: The forecast of results above is based on assumptions deemed reasonable by the Company at the present time, and actual results may differ significantly from forecasts. Please refer to the cautionary statement on the last page.

Consolidated Financial Results Summary

 

1. Fiscal 2008, 3rd Quarter Consolidated Financial Results

(In billions of yen except where noted)

 

 

FY ’08 3rd Q (A)

(Oct. 1, 2007 —

Dec. 31, 2007)

 

FY ’07 3rd Q (B)

(Oct. 1, 2006 —

Dec. 31, 2006)

 

A/B (%)

Net sales

 

911.9

 

871.5

 

105

Operating income

 

63.8

 

63.5

 

100

Income before income

taxes

 

57.9

 

64.9

 

89

Net income

 

42.3

 

42.1

 

100

Basic net income per share

 

19.72 yen

 

19.64 yen

 

100

2. Fiscal 2008, First 9 Months Consolidated Financial Results

(In billions of yen except where noted)

 

 

FY ’08 9 months (A)

(Apr. 1, 2007 —

Dec. 31, 2007)

 

FY ’07 9 months (B)

(Apr. 1, 2006 —

Dec. 31, 2006)

 

A/B (%)

Net sales

 

2,801.6

 

2,663.5

 

105

Operating income

 

193.0

 

157.1

 

123

Income before income

taxes

 

187.5

 

147.4

 

127

Net income

 

133.9

 

98.6

 

136

Basic net income per share

 

62.39 yen

 

45.96 yen

 

136

Note:

 

1) Consolidated financial charts made according to U.S. GAAP.

2) Company has 149 consolidated subsidiaries.

3) This report is unaudited.

CONSOLIDATED PROFIT AND LOSS STATEMENT

 

1. Fiscal 2008, 3rd Quarter

(In millions of yen)

 

 

FY ’08 3rd Q

(Oct. 1, 2007 —

Dec. 31, 2007)

 

FY ’07 3rd Q

(Oct. 1, 2006 —

Dec. 31, 2006)

 

 

 

(A)

 

% of total

 

(B)

 

% of total

 

A – B

 

A/B (%)

Net sales

 

911,913

 

100.0

 

871,533

 

100.0

 

40,380

 

 

105

Cost of sales

 

654,182

 

71.7

 

624,617

 

71.7

 

29,565

 

 

105

Selling, general and

administrative expenses

 

193,897

 

21.3

 

183,340

 

21.0

 

10,557

 

 

106

Operating income

 

63,834

 

7.0

 

63,576

 

7.3

 

258

 

 

100

Other income

 

6,690

 

0.7

 

7,667

 

0.9

 

(977

)

 

87

Interest and dividends

 

4,191

 

0.4

 

2,883

 

0.3

 

1,308

 

 

145

Other

 

2,499

 

0.3

 

4,784

 

0.6

 

(2,285

)

 

52

Other expenses

 

12,621

 

1.4

 

6,313

 

0.7

 

6,308

 

 

200

Interest

 

2,961

 

0.3

 

2,180

 

0.2

 

781

 

 

136

Other

 

9,660

 

1.1

 

4,133

 

0.5

 

5,527

 

 

234

Income before income taxes

 

57,903

 

6.3

 

64,930

 

7.5

 

(7,027

)

 

89

Income taxes

 

19,548

 

2.1

 

26,058

 

3.0

 

(6,510

)

 

75

Equity in earnings of

affiliated companies

 

3,984

 

0.4

 

3,291

 

0.3

 

693

 

 

121

Net income

 

42,339

 

4.6

 

42,163

 

4.8

 

176

 

 

100

2. Fiscal 2008, First 9 Months

(In millions of yen)

 

 

FY ’08 9 months

(Apr. 1, 2007 —

Dec. 31, 2007)

 

FY ’07 9 months

(Apr. 1, 2006 —

Dec. 31, 2006)

 

 

 

(A)

 

% of total

 

(B)

 

% of total

 

A – B

 

A/B (%)

Net sales

 

2,801,658

 

100.0

 

2,663,515

 

100.0

 

138,143

 

 

105

Cost of sales

 

2,014,787

 

71.9

 

1,936,459

 

72.7

 

78,328

 

 

104

Selling, general and

administrative expenses

 

593,845

 

21.2

 

569,874

 

21.4

 

23,971

 

 

104

Operating income

 

193,026

 

6.9

 

157,182

 

5.9

 

35,844

 

 

123

Other income

 

20,678

 

0.7

 

24,228

 

0.9

 

(3,550

)

 

85

Interest and dividends

 

11,904

 

0.4

 

9,208

 

0.3

 

2,696

 

 

129

Other

 

8,774

 

0.3

 

15,020

 

0.6

 

(6,246

)

 

58

Other expenses

 

26,117

 

0.9

 

34,006

 

1.3

 

(7,889

)

 

77

Interest

 

7,383

 

0.2

 

7,256

 

0.3

 

127

 

 

102

Other

 

18,734

 

0.7

 

26,750

 

1.0

 

(8,016

)

 

70

Income before income taxes

 

187,587

 

6.7

 

147,404

 

5.5

 

40,183

 

 

127

Income taxes

 

64,988

 

2.3

 

59,708

 

2.2

 

5,280

 

 

109

Equity in earnings of

affiliated companies

 

11,326

 

0.4

 

10,959

 

0.4

 

367

 

 

103

Net income

 

133,925

 

4.8

 

98,655

 

3.7

 

35,270

 

 

136

CONSOLIDATED BALANCE SHEET

(In millions of yen)

 

 

FY ’08

3rd Q (A)

(ending Dec. 31, 2007)

 

FY ’07

3rd Q (B) (ending Dec. 31, 2006)

 

A — B

 

FY ’07 (C)

(ending Mar. 31, 2007)

 

A — C

(Assets)

Current assets

 

2,089,579

 

 

1,942,432

 

 

147,147

 

 

2,050,500

 

 

39,079

 

Cash and cash equivalents

 

331,469

 

 

269,310

 

 

62,159

 

 

342,640

 

 

(11,171

)

Short-term investments

 

5,704

 

 

5,601

 

 

103

 

 

16,258

 

 

(10,554

)

Trade receivables

 

777,450

 

 

732,759

 

 

44,691

 

 

891,271

 

 

(113,821

)

Inventories

 

699,773

 

 

651,992

 

 

47,781

 

 

520,238

 

 

179,535

 

Prepaid expenses and other current assets

 

275,183

 

 

282,770

 

 

(7,587

)

 

280,093

 

 

(4,910

)

Long-term trade receivables

 

2,657

 

 

3,753

 

 

(1,096

)

 

3,711

 

 

(1,054

)

Investments

 

575,682

 

 

570,639

 

 

5,043

 

 

571,458

 

 

4,224

 

Net property, plant and equipment

 

609,458

 

 

602,700

 

 

6,758

 

 

605,285

 

 

4,173

 

Other assets

 

241,764

 

 

245,709

 

 

(3,945

)

 

221,277

 

 

20,487

 

Total assets

 

3,519,140

 

 

3,365,233

 

 

153,907

 

 

3,452,231

 

 

66,909

 

(Liabilities and shareholders’ equity)

Current liabilities

 

1,524,555

 

 

1,429,838

 

 

94,717

 

 

1,529,838

 

 

(5,283

)

Bank loans and current portion of long-term debt

 

272,259

 

 

240,972

 

 

31,287

 

 

253,141

 

 

19,118

 

Trade payables

 

709,229

 

 

675,373

 

 

33,856

 

 

739,585

 

 

(30,356

)

Other current liabilities

 

543,067

 

 

513,493

 

 

29,574

 

 

537,112

 

 

5,955

 

Long-term debt

 

370,352

 

 

425,894

 

 

(55,542

)

 

387,941

 

 

(17,589

)

Retirement and severance benefits

 

393,959

 

 

425,930

 

 

(31,971

)

 

360,713

 

 

33,246

 

Other fixed liabilities

 

52,371

 

 

12,856

 

 

39,515

 

 

54,169

 

 

(1,798

)

Minority interests

 

61,724

 

 

59,758

 

 

1,966

 

 

60,361

 

 

1,363

 

Shareholders’ equity

 

1,116,179

 

 

1,010,957

 

 

105,222

 

 

1,059,209

 

 

56,970

 

Common stock

 

175,820

 

 

175,820

 

 

—

 

 

175,820

 

 

—

 

Capital surplus

 

210,888

 

 

210,924

 

 

(36

)

 

210,910

 

 

(22

)

Retained earnings

 

740,170

 

 

607,578

 

 

132,592

 

 

632,003

 

 

108,167

 

Accumulated other comprehensive income (loss)

 

(10,193

)

 

17,116

 

 

(27,309

)

 

40,932

 

 

(51,125

)

Treasury stock at cost

 

(506

)

 

(481

)

 

(25

)

 

(456

)

 

(50

)

Total liabilities and shareholders’ equity

 

3,519,140

 

 

3,365,233

 

 

153,907

 

 

3,452,231

 

 

66,909

 

Balance of Debts

 

642,611

 

666,866

 

(24,255

)

 

641,082

 

1,529

 

Accumulated other comprehensive income (loss):

Foreign currency translation adjustments

33,884

23,810

10,074

32,088

1,796

Pension liability adjustments

(90,356

)

—

(90,356

)

(59,723

)

(30,633

)

Minimum pension liability adjustments

—

(72,562

)

72,562

—

—

Unrealized gains (losses) on securities

46,348

65,852

(19,504

)

68,578

(22,230

)

Unrealized gains (losses) on derivative instruments

(69

)

16

(85

)

(11

)

(58

)

CONSOLIDATED CASH FLOW STATEMENT

 

 

 

 

1. Fiscal 2008, 3rd Quarter

(In millions of yen)

 

 

 

 

FY ’08 3rd Q (A)

(Oct. 1, 2007 -Dec. 31, 2007)

 

FY ’07 3rd Q (B)

(Oct. 1, 2006 -Dec. 31, 2006)

 

A — B

I

 

Cash flows from operating activities

 

 

 

 

 

 

1

 

Net income

 

42,339

 

 

42,163

 

 

176

 

2

 

Adjustments to reconcile net income to net cash provided by operating activities

 

 

 

 

 

 

 

 

(1) Depreciation of tangible fixed assets and other

 

33,979

 

 

32,965

 

 

1,014

 

 

 

(2) Decrease in trade receivables

 

6,785

 

 

13,986

 

 

(7,201

)

 

 

(3) Decrease (increase) in inventories

 

(106,042

)

 

(101,732

)

 

(4,310

)

 

 

(4) Increase in trade payables

 

21,952

 

 

19,796

 

 

2,156

 

 

 

(5) Other, net

 

(27,373

)

 

(26,588

)

 

(785

)

 

 

Net cash provided by (used in) operating activities

 

(28,360

)

 

(19,410

)

 

(8,950

)

II

 

Cash flows from investing activities

 

 

 

 

 

 

1

 

Capital expenditure

 

(31,326

)

 

(25,061

)

 

(6,265

)

2

 

Proceeds from sale of property, plant and equipment

 

619

 

 

1,012

 

 

(393

)

3

 

Purchase of short-term investments and investment securities

 

(12,700

)

 

(3,568

)

 

(9,132

)

4

 

Proceeds from sale of short-term investments and investment securities

 

7,872

 

 

7,648

 

 

224

 

5

 

Other, net

 

(2,278

)

 

(15,976

)

 

13,698

 

 

 

Net cash used in investing activities

 

(37,813

)

 

(35,945

)

 

(1,868

)

I+ II

 

Free cash flow

 

(66,173

)

 

(55,355

)

 

(10,818

)

III

 

Cash flows from financing activities

 

 

 

 

 

 

1

 

Proceeds from long-term debt

 

60,358

 

 

15,100

 

 

45,258

 

2

 

Repayment of long-term debt

 

(56,365

)

 

(105,534

)

 

49,169

 

3

 

Increase in bank loans, net

 

50,985

 

 

71,253

 

 

(20,268

)

4

 

Dividends paid

 

(12,879

)

 

(8,586

)

 

(4,293

)

5

 

Purchase of treasury stock

 

(38

)

 

(45

)

 

7

 

6

 

Reissuance of treasury stock

 

6

 

 

15

 

 

(9

)

 

 

Net cash provided by (used in) financing activities

 

42,067

 

 

(27,797

)

 

69,864

 

IV

 

Effect of exchange rate changes on cash and cash equivalents

 

(1,432

)

 

5,407

 

 

(6,839

)

V

 

Net increase (decrease) in cash and cash equivalents

 

(25,538

)

 

(77,745

)

 

52,207

 

VI

 

Cash and cash equivalents at beginning of period

 

357,007

 

 

347,055

 

 

9,952

 

VII

 

Cash and cash equivalents at the end of period

 

331,469

 

 

269,310

 

 

62,159

 

2. Fiscal 2008, First 9 Months

(In millions of yen)

 

 

 

 

FY ’08

9 months (A)

(Apr. 1, 2007 –

Dec. 31, 2007)

 

FY ’07

9 months (B)

(Apr. 1, 2006 –

Dec. 31, 2006)

 

A — B

I

 

Cash flows from operating activities

 

 

 

 

 

 

1

 

Net income

 

133,925

 

 

98,655

 

 

35,270

 

2

 

Adjustments to reconcile net income to net cash provided by operating activities

 

 

 

 

 

 

 

 

(1) Depreciation of tangible fixed assets and other

 

93,138

 

 

100,878

 

 

(7,740

)

 

 

(2) Decrease in trade receivables

 

117,757

 

 

119,962

 

 

(2,205

)

 

 

(3) Decrease (increase) in inventories

 

(176,452

)

 

(150,648

)

 

(25,804

)

 

 

(4) Increase (decrease) in trade payables

 

(31,159

)

 

(43,024

)

 

11,865

 

 

 

(5) Other, net

 

(38,266

)

 

3,505

 

 

(41,771

)

 

 

Net cash provided by operating activities

 

98,943

 

 

129,328

 

 

(30,385

)

II

 

Cash flows from investing activities

 

 

 

 

 

 

1

 

Capital expenditure

 

(94,495

)

 

(95,296

)

 

801

 

2

 

Proceeds from sale of property, plant and equipment

 

2,378

 

 

4,037

 

 

(1,659

)

3

 

Purchase of short-term investments and investment securities

 

(28,992

)

 

(18,754

)

 

(10,238

)

4

 

Proceeds from sale of short-term investments and investment securities

 

21,599

 

 

23,050

 

 

(1,451

)

5

 

Other, net

 

12,562

 

 

(25,058

)

 

37,620

 

 

 

Net cash used in investing activities

 

(86,948

)

 

(112,021

)

 

25,073

 

I+ II

 

Free cash flow

 

11,995

 

 

17,307

 

 

(5,312

)

III

 

Cash flows from financing activities

 

 

 

 

 

 

1

 

Proceeds from long-term debt

 

61,688

 

 

32,200

 

 

29,488

 

2

 

Repayment of long-term debt

 

(66,068

)

 

(145,539

)

 

79,471

 

3

 

Increase in bank loans, net

 

6,522

 

 

71,584

 

 

(65,062

)

4

 

Dividends paid

 

(25,758

)

 

(19,317

)

 

(6,441

)

5

 

Purchase of treasury stock

 

(133

)

 

(95

)

 

(38

)

6

 

Reissuance of treasury stock

 

61

 

 

114

 

 

(53

)

7

 

Other, net

 

–

 

 

2,107

 

 

(2,107

)

 

 

Net cash provided by (used in) financing activities

 

(23,688

)

 

(58,946

)

 

35,258

 

IV

 

Effect of exchange rate changes on cash and cash equivalents

 

522

 

 

6,435

 

 

(5,913

)

V

 

Net increase (decrease) in cash and cash equivalents

 

(11,171

)

 

(35,204

)

 

24,033

 

VI

 

Cash and cash equivalents at beginning of period

 

342,640

 

 

304,514

 

 

38,126

 

VII

 

Cash and cash equivalents at the end of period

 

331,469

 

 

269,310

 

 

62,159

 

CONSOLIDATED SEGMENT INFORMATION

1. Fiscal 2008, 3rd Quarter

1) Sales and Operating Income by Business Segment

(In millions of yen)

Business Segment

 

FY ’08 3rd Q

(Oct. 1, 2007 – Dec. 31, 2007)

 

FY ’07 3rd Q

(Oct. 1, 2006 – Dec. 31, 2006)

 

A/B (%)

Sales

 

Operating income (loss)

 

 

Sales

 

Operating income

 

 

(A)

 

% of total

 

 

(B)

 

% of total

 

 

Energy and Electric Systems

 

216,255

 

 

20.8

 

13,611

 

 

203,265

 

 

20.6

 

14,817

 

 

106

Industrial Automation Systems

 

255,897

 

 

24.6

 

39,803

 

 

236,632

 

 

23.9

 

37,423

 

 

108

Information and Communication Systems

 

129,651

 

 

12.5

 

(1,126

)

 

139,370

 

 

14.1

 

4,912

 

 

93

Electronic Devices

 

47,782

 

 

4.6

 

2,874

 

 

46,134

 

 

4.7

 

2,764

 

 

104

Home Appliances

 

229,202

 

 

22.1

 

15,138

 

 

210,941

 

 

21.3

 

10,145

 

 

109

Others

 

160,554

 

 

15.4

 

3,371

 

 

152,412

 

 

15.4

 

3,283

 

 

105

Subtotal

 

1,039,341

 

 

100.0

 

73,671

 

 

988,754

 

 

100.0

 

73,344

 

 

105

Eliminations and Other

 

(127,428

)

 

–

 

(9,837

)

 

(117,221

)

 

–

 

(9,768

)

 

–

Consolidated Total

 

911,913

 

 

–

 

63,834

 

 

871,533

 

 

–

 

63,576

 

 

105

Note: Inter-segment sales are included in the above chart.

2) Sales and Operating Income by Location

 

(In millions of yen)

Location

 

FY ’08 3rd Q

(Oct. 1, 2007 – Dec. 31, 2007)

 

FY ’07 3rd Q

(Oct. 1, 2006 – Dec. 31, 2006)

 

A/B (%)

 

Sales (A)

 

Operating income

 

Sales (B)

 

Operating income

 

Japan

 

776,724

 

 

45,801

 

 

750,613

 

 

51,740

 

 

103

North America

 

73,288

 

 

2,851

 

 

70,772

 

 

2,355

 

 

104

Asia (excluding Japan)

 

133,612

 

 

12,239

 

 

114,456

 

 

8,357

 

 

117

Europe

 

88,323

 

 

3,098

 

 

71,096

 

 

3,379

 

 

124

Others

 

8,746

 

 

632

 

 

9,455

 

 

559

 

 

93

Subtotal

 

1,080,693

 

 

64,621

 

 

1,016,392

 

 

66,390

 

 

106

Eliminations

 

(168,780

)

 

(787

)

 

(144,859

)

 

(2,814

)

 

–

Consolidated Total

 

911,913

 

 

63,834

 

 

871,533

 

 

63,576

 

 

105

Note: Inter-segment sales are included in the above chart.

3) Overseas Sales

 

(In millions of yen)

Location

 

FY ’08 3rd Q

(Oct. 1, 2007 – Dec. 31, 2007)

 

FY ’07 3rd Q

(Oct. 1, 2006 – Dec. 31, 2006)

 

A/B (%)

 

Sales (A)

 

% of total net sales

 

Sales (B)

 

% of total net sales

 

North America

 

78,338

 

8.6

 

74,271

 

8.5

 

105

Asia (excluding Japan)

 

121,174

 

13.3

 

110,784

 

12.7

 

109

Europe

 

101,126

 

11.1

 

83,708

 

9.6

 

121

Others

 

20,898

 

2.3

 

19,689

 

2.3

 

106

Total overseas sales

 

321,536

 

35.3

 

288,452

 

33.1

 

111

2. Fiscal 2008, First 9 Months

1) Sales and Operating Income by Business Segment

(In millions of yen)

Business Segment

 

FY ’08 9 months

(Apr. 1, 2007 – Dec. 31, 2007)

 

FY ’07 9 months

(Apr. 1, 2006 – Dec. 31, 2006)

 

A/B (%)

Sales

 

Operating income (loss)

 

Sales

 

Operating income

 

 

(A)

 

% of total

 

 

(B)

 

% of total

 

 

Energy and Electric Systems

 

656,550

 

 

20.6

 

37,062

 

 

594,570

 

 

19.7

 

21,530

 

 

110

Industrial Automation Systems

 

 

747,644

 

 

23.5

 

106,649

 

 

702,926

 

 

23.3

 

102,582

 

 

106

Information and Communication Systems

 

 

411,743

 

 

13.0

 

(575

)

 

444,307

 

 

14.8

 

10,204

 

 

93

Electronic Devices

 

142,976

 

 

4.5

 

8,949

 

 

137,771

 

 

4.6

 

9,970

 

 

104

Home Appliances

 

 

745,637

 

 

23.4

 

53,548

 

 

675,920

 

 

22.5

 

25,582

 

 

110

Others

 

477,693

 

 

15.0

 

10,407

 

 

453,229

 

 

15.1

 

9,761

 

 

105

Subtotal

 

3,182,243

 

 

100.0

 

216,040

 

 

3,008,723

 

 

100.0

 

179,629

 

 

106

Eliminations and Other

 

 

(380,585

)

 

–

 

(23,014

)

 

(345,208

)

 

–

 

(22,447

)

 

–

Consolidated Total

 

 

2,801,658

 

 

–

 

193,026

 

 

2,663,515

 

 

–

 

157,182

 

 

105

Note: Inter-segment sales are included in the above chart.

2) Sales and Operating Income by Location

 

(In millions of yen)

Location

 

FY ’08 9 months

(Apr. 1, 2007 – Dec. 31, 2007)

 

FY ’07 9 months

(Apr. 1, 2006 – Dec. 31, 2006)

 

A/B (%)

 

Sales (A)

 

Operating income

 

Sales (B)

 

Operating income

 

Japan

 

2,371,456

 

 

139,716

 

 

2,289,798

 

 

126,109

 

 

104

North America

 

206,957

 

 

6,782

 

 

205,015

 

 

4,325

 

 

101

Asia (excluding Japan)

 

419,672

 

 

36,404

 

 

346,343

 

 

22,967

 

 

121

Europe

 

286,771

 

 

13,922

 

 

215,029

 

 

9,094

 

 

133

Others

 

23,962

 

 

1,055

 

 

23,096

 

 

1,035

 

 

104

Subtotal

 

3,308,818

 

 

197,879

 

 

3,079,281

 

 

163,530

 

 

107

Eliminations

 

(507,160

)

 

(4,853

)

 

(415,766

)

 

(6,348

)

 

–

Consolidated Total

 

2,801,658

 

 

193,026

 

 

2,663,515

 

 

157,182

 

 

105

Note: Inter-segment sales are included in the above chart.

3) Overseas Sales     

 

(In millions of yen)

Location

 

FY ’08 9 months

(Apr. 1, 2007 – Dec. 31, 2007)

 

FY ’07 9 months

(Apr. 1, 2006 – Dec. 31, 2006)

 

A/B (%)

 

Sales (A)

 

% of total net sales

 

Sales (B)

 

% of total net sales

 

North America

 

221,000

 

7.9

 

219,317

 

8.2

 

101

Asia (excluding Japan)

 

396,428

 

14.0

 

341,593

 

12.8

 

116

Europe

 

318,117

 

11.4

 

249,023

 

9.4

 

128

Others

 

63,188

 

2.3

 

62,354

 

2.3

 

101

Total overseas sales

 

998,733

 

35.6

 

872,287

 

32.7

 

114

Cautionary Statement

The expectation of operating results herein and any associated statement to be made orally with respect to the Company’s current plans, estimates, strategies and beliefs and any other statements that are not historical facts are forward-looking statements. Words such as “expects”, “anticipates”, “plans”, “believes”, “scheduled”, “estimated”, “targeted” along with any variations of these words and similar expressions are intended to identify forward-looking statements which include but are not limited to projections of revenues, earnings, performance and production. While the statements herein are based on certain assumptions and premises that the Company trusts and considers to be reasonable under the circumstances to the date of announcement, you are requested to kindly take note that actual operating results are subject to change due to any of the factors as contemplated hereunder and/or any additional factor unforeseeable as of the date of this announcement. Such factors materially affecting the expectations expressed herein shall include but are not limited to the following:

1) Important trends

The Mitsubishi Electric Group’s operations may be affected by trends in the global economy, social conditions, laws, tax codes, and regulations.

2) Foreign currency exchange rates

Fluctuations in foreign currency markets may affect Mitsubishi Electric’s sales of exported products and purchases of imported materials that are denominated in U.S. dollars or euros, as well as its Asian production bases’ sales of exported products and purchases of imported materials that are denominated in foreign currencies.

3) Stock markets

A fall in stock market prices may cause Mitsubishi Electric to record devaluation losses on marketable securities, or cause an increase in retirement benefit obligations in accordance with a decline in the fair value of pension assets.

4) Supply/demand balance for products and procurement conditions for materials and components

A decline in prices and shipments due to changes in the supply/demand balance may adversely affect mainly Mitsubishi Electric’s Information and Communication Systems, Electronic Devices, and Home Appliances segments. In addition, an increase in material prices due to a worsening of material and component procurement conditions may adversely affect all of Mitsubishi Electric’s operations.

5) Fund procurement

An increase in interest rates, the yen interest rate in particular, would increase Mitsubishi Electric’s interest expenses.

6) Significant patent matters

Important patent filings, licensing, copyrights and patent-related disputes may adversely affect related businesses.

7) Environmental matters

We may appropriate funds for losses or increase allowances to respond to regulation trends or outbreaks of issues related to the environment. This may impact manufacturing and all corporate activities of the Mitsubishi Electric Group.

8) Quality of products and services

We may appropriate funds for losses from defective services or products, and the lowered reputation of the quality of all our products and services may affect the entire Mitsubishi Electric group.

9) Litigation and other legal proceedings

The Mitsubishi Electric Group’s operations may be affected by lawsuits or other legal proceedings against Mitsubishi Electric, its subsidiaries and/or equity-method affiliated companies.

10) Disruptive changes

Disruptive changes in technology, development of products using new technology, timing of production, and market introduction may adversely affect performance mainly in Mitsubishi Electric’s Information and Communication Systems, Electronic Devices, and Home Appliances segments.

11) Business restructuring

The Mitsubishi Electric Group may record losses due to restructuring measures.

12) Natural disasters

The Mitsubishi Electric Group’s operations, particularly manufacturing activities, may be affected by the occurrence of earthquakes, typhoons, tsunami, fires and other large-scale disasters.

13) Other significant factors

The Mitsubishi Electric Group’s operations may be affected by the outbreak of social or political upheaval due to terrorism, war or other factors.

About Mitsubishi Electric

With over 80 years of experience in providing reliable, high-quality products to both corporate clients and general consumers all over the world, Mitsubishi Electric Corporation (TOKYO:6503) 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 building equipment. The company recorded consolidated group sales of 3,855.7 billion yen (US$ 32.7billion(a)) in the fiscal year ended March 31, 2007. For more information visit

http://global.mitsubishielectric.com

(a)At an exchange rate of 118 yen to the US dollar, the rate given by the Tokyo Foreign Exchange Market on March 31, 2007