Tokyo -  The Japanese electronics maker NEC Corp slashed the operating profit it expected in the current fiscal year by 40 per cent because of falling demand for its products, particularly computer chips.

It forecast operating profit, which measures a company's earnings minus interest payments and taxes, at 60 billion yen (664 million dollars) for the year ending March 31, down from a July forecast of 100 billion yen.

In the past financial year, NEC saw an operating loss of 6.2 billion yen.

Operating profit is seen as a gauge of a firm's earning power from ongoing operations.

Its sales prediction for this year was lowered to 3.66 trillion yen from 3.73 trillion while it kept its forecast for net income at 10 billion yen.

NEC also reported its results for the first half of the fiscal year, recording a net loss of 43.6 billion yen after profits of 1.8 billion yen in the same period a year earlier.

Its sales shrank 22.3 per cent to 1.65 trillion yen.

NEC is counting on a turnaround with a planned merger between its chipmaking subsidiary NEC Electronics Corp and Renesas Technology Corp, which is also struggling. The deal would create Japan's largest chipmaker. (dpa)