The three said their electronics device business had turned around, reflecting robust semiconductor chip demand due to their growing application in digital products such as digital cameras and cellular phones.

NEC said its net profit was 11.1 billion yen (105 million dollars) for the three months to December, reversing a loss of 4.5 billion yen for the same period in 2002, while operating profit was 33.5 billion yen, up 44.4 percent from 23.2 billion a year earlier.

"Thanks to past cost-cutting efforts... the third quarter results came in line with our expectations. We are now on course to achieve the full year to March 2004 forecast," said NEC senior managing director Shigeo Matsumoto.

Fujitsu's third quarter operating profit came in at 10.1 billion yen, reversing an operating loss of 13.1 billion a year earlier. Net profit was in the black for the first time in three quarters at 7.6 billion yen against a loss of 24.9 billion the previous year.

"The fact that we have managed to register operating profit for the second straight quarter underscored the fact that our profit is now on a recovery trend," Fujitsu senior managing director Masamichi Ogura said.

Toshiba saw its net loss in the period widen to 9.2 billion yen, after missing the benefit of a tax return a year earlier, but reported a 478 percent surge in operating profit to 14.0 billion yen on revenue of 1.32 trillion yen.

All three enjoyed particularly strong operating profit growth in their electronics devices divisions which include semiconductor, flash memory and multi-chip package business.

Both NEC and Fujitsu made a loss at operating level for the segment in the same period last year, while Toshiba's operating profit surged 270 percent.

"On top of our cost-cutting efforts, we are also beginning to see a sharp rise in demand for semiconductor chips and digital products. As a result, our LCD and semiconductor divisions posted some profits in the third quarter," Toshiba corporate senior vice president Sadazumi Ryu said.

However, the executives pointed to the continued challenging earnings environment and promised continued efforts to rationalize their businesses.

"Although corporate demand for IT (information technology) investment itself is now recovering... downward pressure on prices is also becoming stronger," Fujitsu's Ogura said.

Similarly, NEC's Matsumoto said lower IT solutions service fees had "diluted, to an extent, the impact of our cost-cutting efforts," and they would have to be accelerated, although he did not elaborate.

"How quickly we can adapt ourselves to changes taking place in the market should hold a key to the earnings prospects in the new fiscal year (to March ," Matsumoto said.

Hit by price competition from Hewlett-Packard and shortage in parts supply, Toshiba, meanwhile, posted an operating loss of 5.6 billion yen in the personal computer segment for October-December, reversing an operating profit of 700 million yen the previous year.

NEC left its full year to March forecast unchanged, seeing a 40 billion-yen net profit, 160 billion-yen pre-tax profit and 180 billion yen operating profit on 4.85 trillion yen in revenue.

Fujitsu maintained its full year net profit forecast at 30 billion yen and operating profit forecast at 150 billion yen.

The current profit target, however, was lowered to 50 billion yen from 60 billion yen previously, Fujitsu said citing the adverse impact of the appreciation of the yen and the deconsolidation of Fanuc.

Toshiba also maintained its full year forecast, seeing 25 billion yen in net profit, 140 billion yen in operating profit, and 90 billion yen in pretax profit on revenue of 5.65 trillion.

SPACE.WIRE