UPDATE 1-Japan's NEC cuts outlook; chips, networks weak

* Cuts oper outlook 40 pct, says bracing for severe Q4

* Oper profit down 75 pct, tumbles to net loss in Q2

* Hitachi Q2 oper profit down 78 pct, net loss widens

* Both say no immediate need to raise capital

(Adds executive comment, background, Hitachi results)

TOKYO, Oct 29 (Reuters) - NEC Corp (6701.T), Japan's biggest PC maker, cut its full-year operating profit outlook by 40 percent on deepening losses on its microchip unit and sluggish sales of its network systems.

NEC, which has been dependent on orders from Japan's biggest phone company Nippon Telegraph and Telephone Corp (9432.T), said on Thursday that its outlook was hit by a shortage in large orders for telecom network systems and slow capex by firms.

It was also hurt by a sudden drop in demand for chips used in Nintendo Co Ltd's (7974.OS) Wii console, that deepened losses at its chip unit NEC Electronics (6723.T).

"January-March could be very severe," President Kaoru Yano said following a news conference. "At this point, it's hard to read which way things will go."

NEC said it now sees an operating profit of 60 billion yen ($661 million) instead of its previous estimate for 100 billion yen in the year to next March.

That is below the consensus estimate of 70.4 billion yen by 15 analysts polled by Thomson Reuters I/B/E/S.

It is now seeking new revenues in cloud computing both in Japan and abroad, and is raising planned fixed cost cuts by 20 billion yen to 290 billion yen.

The company, which also has a battery joint venture with Japan's No.3 automaker Nissan Motor Co (7201.T), posted a 75 percent fall in quarterly operating profit to 2.3 billion yen.

It tumbled to a net quarterly loss of 9.8 billion yen from a 1.3 billion yen profit a year ago on a 22 percent fall in sales.

Sources told Reuters in July that NEC was considering raising around 200 billion yen through a public offering and hybrid securities.

NEC, rival Hitachi Ltd (6501.T) and Mitsubishi Electric (6503.T) have promised to inject a total 200 billion yen into their troubled chipmakers, NEC Electronics and Renesas Technology Corp, which are slated to merge in April.

NEC's shareholders' equity ratio is 20.9 percent, while Hitachi's is 10.9 percent.

Executives at both firms said that they did not need to raise funds immediately.

"We have a commitment line of 500 billion yen, and are not alarmed," Hitachi's executive vice president Takashi Miyoshi told reporters at a news conference. "We need to strengthen our capital in the future, but would like to approach the issue from multiple angles along with restructuring efforts."

Hitachi, the world's No.3 maker of hard drives, reported a 78 percent fall in its quarterly operating profit to 25.8 billion yen on weak sales of microchips and semiconductor equipment, as well as in construction and autos-making equipment.

Its quarterly net loss widened to 50.5 billion yen from 17.3 billion yen the previous year on a 19 percent fall in sales.

Hitachi's annual outlook, revised up earlier this week for an operating profit of 80 billion yen, is just short of the consensus estimate of 90 billion yen by 4 analysts polled by Thomson Reuters I/B/E/S.

Hitachi, which trails Seagate Technology (STX.O) and Western Digital Corp (WDC.N), said its HDD unit earned a profit of $59 million in July-September, down 31 percent from the previous year. The earnings will go onto Hitachi's consolidated books in October-December.

NEC shares fell 3.4 percent and Hitachi dropped 1.4 percent prior to the results, underperforming a 0.7 percent fall in Tokyo's electrical machinery sub-index .IELEC.T. ($1=90.72 Yen) (Reporting by Mayumi Negishi; Editing by Joseph Radford)