Mitsubishi Electric Announces Consolidated Financial Results for the First Half and...

Mitsubishi Electric Announces Consolidated Financial Results for the First Half and Second Quarter of Fiscal 2009

TOKYO--(Business Wire)--
Mitsubishi Electric Corporation (President and CEO: Setsuhiro
Shimomura)(TOKYO:6503) announced today its financial results for the
second quarter ending September 30, 2008, of the current fiscal year
ending March 31, 2009 (fiscal 2009).

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1. Consolidated Half-year Results (April 1, 2008 - September 30, 2008)
----------------------------------------------------------------------

Net sales: 1,898.3 billion yen (No change from the same
period last year)
Operating income: 133.3 billion yen (3% increase from the same
period last year)
Income before income 128.5 billion yen (1% decrease from the same
taxes: period last year)
Net income: 79.4 billion yen (13% decrease from the same
period last year)
*T

During the first half of fiscal 2009, the global economy
experienced a stronger sense of slowdown mainly in the United States
and Europe, which also affected the Japanese economy, drifting
relatively weak in production and exports. With effects from steel
prices soaring, etc., management conditions are showing increased
general severity. While turmoil in the global financial market
increased graveness after mid-September, the yen became stronger
against major currencies.

Under these circumstances, consolidated net sales for the first
half of fiscal 2009 grew slightly to 1,898.3 billion yen compared to
the same period of the previous fiscal year, with increased sales in
the Energy and Electric Systems and the Industrial Automation Systems
segments, etc. Consolidated operating income increased 3% to 133.3
billion yen compared to the same period of the previous fiscal year
due to increased profit in the Energy and Electric Systems, the
Information and Communication Systems and the Home Appliances
segments, etc.

Consolidated Financial Results by Business Segment (First Half,
Fiscal 2009)

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Energy and Electric Systems

Total sales: 451.7 billion yen (3% increase from the same period
last year)
Operating income: 25.2 billion yen (1.8 billion yen increase from
the same period last year)
*T

The social infrastructure systems business saw increases in both
orders and sales compared to the same period of the previous fiscal
year due to growth in domestic and overseas power generation business,
etc.

The building systems business experienced an increase in orders
compared to the same period of the previous fiscal year due to
increases in elevators and escalators for the UAE as well as large
projects in the United States, while sales decreased compared to the
same period of the previous fiscal year, resulting from a decrease in
construction for new buildings due to the revised building standards
law in Japan, as well as a decline in the residential real-estate
market caused by the weakening economy.

As a result, total sales for this segment increased 3% from the
same period of the previous fiscal year. Operating income increased
from the same period of the previous fiscal year due to increased
sales, etc.

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Industrial Automation Systems

Total sales: 505.5 billion yen (3% increase from the same period
last year)
Operating income: 59.9 billion yen (6.9 billion yen decrease from
the same period last year)
*T

The factory automation systems business saw increases in both
orders and sales compared to the same period of the previous fiscal
year, upheld by demand, in the first half of the period, for flat
panel display related investments in Korea and Taiwan as well as for
domestic surface mounting systems related investments.

The automotive equipment business saw an increase in both orders
and sales compared to the same period of the previous fiscal year due
to increases in alternators and starters, etc. for Japanese
multinational automotive manufacturers, despite a slowdown in orders
after August.

As a result, total sales for this segment increased by 3% compared
to the same period of the previous fiscal year. Operating income
decreased compared to the same period of the previous fiscal year due
to strong yen, etc.

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Information and Communication Systems

Total sales: 270.0 billion yen (4% decrease from the same period
last year)
Operating income: 9.6 billion yen (9.1 billion yen increase from the
same period last year)
*T

The telecommunications equipment business saw decreases in both
orders and sales compared to the same period of the previous fiscal
year due to the termination of the mobile handset business, despite
increased orders and sales in the communications infrastructure
systems business.

The information systems and services business saw an increase in
sales from the same period of the previous fiscal year due to growth,
in the first half of the period, in our system integration business
and operation services business, etc.

The electronic systems business saw increases in both orders and
sales compared to the same period of the previous fiscal year due to
expansion of our electronics business, etc.

As a result, total sales for this segment decreased 4% compared to
the same period of the previous fiscal year. Operating income
increased compared to the same period of the previous fiscal year,
owing to the termination of our mobile handset business, etc.

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Electronic Devices

Total sales: 100.4 billion yen (6% increase from the same period
last year)
Operating income: 3.5 billion yen (2.5 billion yen decrease from the
same period last year)
*T

The semiconductors business saw increases in both orders and sales
compared to the same period of the previous fiscal year due to
increases in power modules, etc., mainly for trains and other
infrastructures, despite decreases in power amplifiers for domestic
mobile handsets and in laser diodes for recordable DVD players.

The liquid crystal business saw increases in both orders and sales
compared to the same period of the previous fiscal year due to an
increase in products for consumer use.

As a result, total sales for the segment increased 6% compared to
the same period of the previous fiscal year. Operating income
decreased compared to the same period of the previous fiscal year due
to falling semiconductor prices, etc.

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Home Appliances

Total sales: 520.8 billion yen (1% increase from the same period
last year)
Operating income: 42.3 billion yen (3.9 billion yen increase from
the same period last year)
*T

The home appliances business saw an increase in sales by 1%
compared to the same period of the previous fiscal year due to
increases in solar power generation systems mainly for the European
and U.S. market as well as in domestic air conditioners and electric
hot water supply systems, etc.

Operating income increased compared to the same period of the
previous fiscal year due to increases in sales, etc.

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Others

Total sales: 303.3 billion yen (4% decrease from the same period
last year)
Operating income: 6.4 billion yen (0.5 billion yen decrease from the
same period last year)
*T

Sales decreased 4% compared to the same period of the previous
fiscal year mainly in our affiliated companies involved in materials
procurement and logistics, etc.

Operating income decreased compared to the same period of the
previous fiscal year due to decreases in sales, etc.

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2. Consolidated Second-Quarter Results (July 1, 2008 - September 30,
2008)
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Net sales: 1,019.3 billion yen (No change from the same period
last year)
Operating income: 65.9 billion yen (4% increase from the same
period last year)
Income before 49.5 billion yen (21% decrease from the same
income taxes: period last year)
Net income: 24.2 billion yen (46% decrease from the same
period last year)
*T

Consolidated net sales for this quarter grew slightly to 1,019.3
billion yen compared to the same period of the previous fiscal year,
with increased sales in the Energy and Electric Systems segment, etc.
Consolidated operating income increased 4% to 65.9 billion yen
compared to the same period of the previous fiscal year due to
increased profit in the Energy and Electric Systems and the
Information and Communication Systems segments, etc.

Consolidated Financial Results by Business Segment (Second
Quarter, Fiscal 2009)

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Energy and Electric Systems

Total sales: 256.5 billion yen (5% increase from the same period
last year)
Operating income: 12.3 billion yen (2.2 billion yen increase from the
same period last year)
*T

The social infrastructure systems business saw increases in both
orders and sales compared to the same period of the previous fiscal
year due to growth in domestic and overseas power generation business.

The building systems business experienced an increase in orders
compared to the same period of the previous fiscal year due to
increases in elevators and escalators for the UAE, while sales
decreased compared to the same period of the previous fiscal year,
resulting from a decrease in construction for new buildings due to the
revised building standards law in Japan, as well as a decline in the
residential real-estate market caused by the weakening economy.

As a result, total sales for this segment increased 5% from the
same period of the previous fiscal year. Operating income increased
from the same period of the previous fiscal year due to increased
sales, etc.

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Industrial Automation Systems

Total sales: 252.2 billion yen (No change from the same period
last year)
Operating income: 23.4 billion yen (5.5 billion yen decrease from
the same period last year)
*T

The factory automation systems business saw decreases in both
orders and sales compared to the same period of the previous fiscal
year, with a downtrend in the strong demand for industrial machinery,
as well as a slowdown for flat panel display and surface mounting
system related investments.

The automotive equipment business saw an increase in both orders
and sales compared to the same period of the previous fiscal year due
to increases in alternators and starters, etc. for Japanese
multinational automotive manufacturers, despite a slowdown in orders
after August.

As a result, total sales for this segment was unchanged compared
to the same period of the previous fiscal year. Operating income
decreased compared to the same period of the previous fiscal year due
to strong yen, etc.

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Information and Communication Systems

Total sales: 165.2 billion yen (2% increase from the same period
last year)
Operating income: 8.3 billion yen (7.8 billion yen increase from the
same period last year)
*T

The telecommunications equipment business saw decreases in both
orders and sales compared to the same period of the previous fiscal
year due to the termination of the mobile handset business, despite
increased orders and sales in the communications infrastructure
systems business.

The information systems and services business saw a decrease in
sales from the same period of the previous fiscal year due to a
decrease in our system integration business and IT infrastructure
services business.

The electronic systems business saw increases in both orders and
sales compared to the same period of the previous fiscal year due to
expansion of our electronics business, etc.

As a result, total sales for this segment increased 2% compared to
the same period of the previous fiscal year. Operating income
increased compared to the same period of the previous fiscal year,
owing to the termination of our mobile handset business, etc.

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Electronic Devices

Total sales: 50.8 billion yen (7% increase from the same period
last year)
Operating income: 1.9 billion yen (1.7 billion yen decrease from the
same period last year)
*T

The semiconductors business saw a decrease in orders compared to
the same period of the previous fiscal year due to decreases in power
amplifiers for domestic mobile handsets and in laser diodes for
recordable DVD players, while sales increased compared to the same
period of the previous fiscal year owing to increases in power
modules, etc. mainly for trains and other infrastructures.

The liquid crystal business saw increases in both orders and sales
compared to the same period of the previous fiscal year due to an
increase in products for consumer use.

As a result, total sales for the segment increased 7% compared to
the same period of the previous fiscal year. Operating income
decreased compared to the same period of the previous fiscal year due
to falling semiconductor prices, etc.

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Home Appliances

Total sales: 267.0 billion yen (4% decrease from the same period
last year)
Operating income: 19.9 billion yen (No change from the same period
last year)
*T

The home appliances business saw a decrease in sales by 4%
compared to the same period of the previous fiscal year due to
decreases sales of air conditioners for some regions in Europe,
despite increases in solar power generation systems for the overseas
market as well as in domestic air conditioners and electric hot water
supply systems, etc.

Operating income was unchanged compared to the same period of the
previous fiscal year due to changes in our product mix, etc.

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Others

Total sales: 162.4 billion yen (3% decrease from the same period
last year)
Operating income: 5.3 billion yen (0.6 billion yen increase from the
same period last year)
*T

Sales decreased by 3% compared to the same period of the previous
fiscal year mainly in our affiliated companies involved in materials
procurement and logistics, etc.

Operating income increased compared to the same period of the
previous fiscal year due to cost reductions, etc.

FINANCIAL CONDITION (CONSOLIDATED BASIS)

Assets, Liabilities, and Shareholders' Equity

The company's total assets declined from the end of the previous
fiscal year by 24.6 billion yen to 3,460.4 billion yen. While cash and
cash equivalents increased by 12.7 billion yen, and inventory
increased by 76.3 billion yen due to progress in work-in-processes,
etc., accounts receivables decreased by 144.9 billion yen due to
accelerated collection of our credits.

The balance of outstanding interest-bearing debts fell by
11.7billion yen from the end of the previous fiscal year to 539.0
billion yen, with a reduction of its ratio to total assets down to
15.6% (an improvement by 0.2 point compared to the end of the previous
fiscal year). Trade payables decreased by 68.9 billion yen, and
retirement and severance benefits increased by 32.5 billion yen due to
decreases in pension assets, etc. resulting from a decline in stock
prices, etc.

Shareholders' equity increased by 22.8 billion yen compared to the
previous fiscal year to 1,054.2 billion, with an improvement in ratio
of shareholders' equity to total assets of 0.9 points compared to the
previous fiscal year to 30.5 percent. While accumulated other
comprehensive income decreased by 41.4 billion yen due to a decline in
stock prices, etc., retained earnings increased by 64.4 billion yen
owing to a 79.4 billion yen net income despite a dividend payment of
15.0 billion yen.

Cash Flow

Cash flows from operating activities increased by 42.0 billion yen
compared to the same period of the previous fiscal year to 169.3
billion yen (inflow) due to accelerated collection of trade
receivables, etc.

Cash flows from investing activities increased by 59.6 billion yen
compared to the same period of the previous fiscal year to 108.7
billion yen (outflow) due to increases in capital expenditures, etc.
Consequently, free cash flow reached revenues of 60.5 billion yen.
Cash flows from financing activities were 40.7 billion yen (outflow)
due to dividend payment and debt repayment.

FORECAST FOR FISCAL 2009 (ending March 31, 2009)

The world economy is expected to continue its downtrend, affected
by the financial crisis, etc. The Japanese economy is also expected to
experience continued weakness mainly in the corporate sector with a
slowdown in foreign demands and capital expenditures. Also arising
from stronger yen and further effects from the financial crisis,
increased risk of an economic slowdown does not make us optimistic
about our management environments.

Under these circumstances, the Mitsubishi Electric Group will
continue to increase and strengthen profitability in each business
segment. In addition, we are committed to implementing various
company-wide measures toward improving business performance and
financial standing. We will also realize sustainable growth by
steadfast growth strategies.

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, etc.
Therefore, our business performance is expected to fall below our
previous forecast for fiscal 2009, and we will modify the consolidated
earnings forecast for fiscal 2009 from the announcement on July 28,
2008 and the non-consolidated earnings forecast for fiscal 2009
announced on April 30, 2008.

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Consolidated earnings forecast for fiscal 2009

Previous forecast Revised forecast
Net sales: 4,050.0 billion 3,900.0 billion (4% decrease from
yen yen last year)
Operating 268.0 billion yen 220.0 billion yen (18% decrease
income: from last year)
Income before 240.0 billion yen 200.0 billion yen (12% decrease
income taxes: from last year)
Net income: 158.0 billion yen 120.0 billion yen (24% decrease
from last year)
*T

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Non-consolidated earnings forecast for fiscal 2009

Previous Revised forecast
forecast
Net sales: 2,440.0 billion 2,390.0 billion (4% decrease from
yen yen last year)
Operating income: 110.0 billion 75.0 billion yen (48% decrease
yen from last year)
Ordinary profit: 110.0 billion 95.0 billion yen (29% decrease
yen from last year)
Net income: 80.0 billion yen 60.0 billion yen (22% decrease
from last year)

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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.

Notes

(1) Change of status in material affiliates in this quarterly
period: none

(2) Abbreviated accounting procedures and procedures inherent to
compiling quarterly consolidated financial statements: not applicable

(3) Changes in principles and procedures of accounting methods for
compiling quarterly consolidated financial statements, or in
presentation methods, etc.: none

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 4,049.8 billion yen (US$ 40.5 billion(a)) in the fiscal year ended
March 31, 2008. For more information visit

http://global.mitsubishielectric.com

(a)At an exchange rate of 100 yen to the US dollar, the rate given
by the Tokyo Foreign Exchange Market on March 31, 2008

Mitsubishi Electric Corporation
Investor Relations Inquiries:
Investor Relations Group
Corporate Finance Division
+81-3-3218-2391
Cad.Irg@rk.MitsubishiElectric.co.jp
Media Contact:
Yurika Fujimoto, +81-3-3218-3380
Public Relations Division
prd.gnews@nk.MitsubishiElectric.co.jp
http://global.mitsubishielectric.com/news/

Copyright Business Wire 2008