Business · Companies · 13 hrs ago
NEC raises annual profit forecast as sales grow, but cash flow turns negative
NEC reported that sales rose 11.7% and operating profit rose 47.7% in the six months to September 2026.
The Japanese technology company said growth in its BluStellar IT services, better results in social infrastructure and the addition of US company CSG helped lift results.
NEC raised its annual operating profit forecast to 460 billion yen, up from 430 billion yen, and increased its sales forecast to 3.74 trillion yen.
But it expects free cash flow to swing from a 300 billion yen surplus to a 90 billion yen deficit, largely because acquiring a subsidiary involved about 413.4 billion yen in spending.
BluStellar sales grew 29.5%, while NEC's established IT business shrank, making it important for newer areas to keep growing.
The annual dividend forecast remains 40 yen per share, unchanged from the previous estimate.
NEC plans to start offering its cotomi Gateway AI platform in November 2026, while investors will watch whether profit growth can continue alongside stronger cash generation.
NEC raised its full-year revenue forecast to ¥3.74 trillion and its Non-GAAP operating profit forecast to ¥460 billion.
For the six months through September, revenue rose 11.7% year on year to ¥1.754 trillion and Non-GAAP operating profit rose 47.7% to ¥188.3 billion.
Growth in BluStellar, improved profitability in social infrastructure and the contribution of CSG supported the revised forecasts.
NEC cut its full-year free cash flow forecast from positive ¥300 billion to negative ¥90 billion, citing spending of about ¥413.4 billion to acquire a subsidiary.
Its annual dividend forecast remained unchanged at ¥40 per share.
- Who
- NEC, the Japanese technology and electronics company.
- What
- It raised its full-year revenue and Non-GAAP operating profit forecasts, while lowering its free cash flow forecast to a deficit.
- When
- NEC announced the results on October 28, 2026, for the six months through September.
- Where
- Not stated
- Why
- BluStellar growth, improved profitability in social infrastructure and CSG’s contribution supported the profit forecast. Spending of about ¥413.4 billion to acquire a subsidiary drove the lower free cash flow forecast.
This story does not have two clearly opposing sides.
NEC made CSG Systems International a consolidated subsidiary.
NEC announced its six-month results and revised its full-year forecasts.
NEC planned to begin offering its cotomi Gateway AI platform.
NEC expected the Petal undersea cable system connecting the United States and France to begin operating.
- Six-month revenue
- ¥1.754 trillion, up 11.7% year on year
- Six-month Non-GAAP operating profit
- ¥188.3 billion, up 47.7% year on year
- Full-year Non-GAAP operating profit forecast
- ¥460 billion, raised from ¥430 billion
- Full-year revenue forecast
- ¥3.74 trillion, raised from ¥3.54 trillion
- Full-year free cash flow forecast
- Negative ¥90 billion, revised from positive ¥300 billion
- Acquisition-related spending
- About ¥413.4 billion
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We took into account recent business progress and CSG's consolidation.