Mitsubishi Electric has revised its group net profit forecast of 120 billion yen, made in October, to a drastically reduced 10 billion yen, due to reduced profit over tough economic times in 2008.

This represents a 94 per cent reduction in the company’s expectations. In addition to this the company has just announced a 28.3 billion yen loss for the period of October to December 2008.

In contrast Mitsubishi Electric made a profit of 42.3 billion yen for the corresponding period last year. The company has attributed this loss to “slumping demand from car and flat-panel makers and losses at its chip affiliate,” Mitsubishi said in a statement.

Sales also decreased over the period, the 807.9 billion yen earnings represent an 11 per cent drop from the same period in the last fiscal year.

Mitsubishi demonstrated decreased sales in electronic devices and home appliances, industrial automation systems and information communications systems, but witnessed increased sales in energy and electric systems.

The loss has also been largely attributed to the slumping business at Renesas Technology Corp, an affiliate founded in 2003 by the merger of chip divisions of Mitsubishi Electric and Hitachi Ltd. Not to mention the increased strength of the yen.