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DJ NEC: No Change In FY Earnings Outlook Due To US Penalty

TOKYO (Dow Jones)--NEC Corp. (6701.TO) said Tuesday that it doesn't expect any change in its earnings outlook for this fiscal year ending March due to its affiliate's agreement to pay $84 million in fines on price-fixing of a memory chip in the U.S.
Elpida Memory Inc. (6665.TO) will pay $84 million and plead guilty to charges of price-fixing of DRAM, or dynamic random access memory, chips, the Justice Department said Monday. It is accused of conspiring with other makers of DRAM chips from April 1999 through June 2002.

(MORE TO FOLLOW) Dow Jones Newswires
01-30-06 2051ET
Copyright (c) 2006 Dow Jones & Company, Inc.

DJ NEC: No Change In FY Earnings Outlook Due To US Penalty-2

Elpida, which was initially set up as a 50-50 joint venture by NEC Corp. (6701.TO) and Hitachi Ltd. (6501.TO) in December 1999, went public on the Tokyo Stock Exchange in November 2004. It was still equally owned until June 2002.
Of the $84-million penalty, Elpida will be required to pay $9.5 million. Of the remainder, NEC will pay $46.75 million and Hitachi Ltd. will pay $27.75 million.
NEC said in a press release that it has come to an agreement with Elpida to contribute to the penalty, in light of the fact that the settlement period included a time when NEC sold DRAMs in the U.S. But the firm has not changed its earnings outlook for this fiscal year, as the amount of its payment is within what the company has already booked as a provision.
Separately, a Hitachi spokesman said the company doesn't expect an impact on its earnings outlook from the latest penalty for this fiscal year.
At the end of September 2005, Hitachi held a 19.7% stake in Elpida and NEC had 13.9%.
-By Hiroyuki Kachi, Dow Jones Newswires; 813-5255-2929; [e-mail]
-Edited by Shawn Schroter and Jay Alabaster

(END) Dow Jones Newswires
01-30-06 2116ET
Copyright (c) 2006 Dow Jones & Company, Inc.