While still somewhat weak, Mitsubishi Electric Corp.'s profitability and cash flow are recovering gradually. Its operating margin after depreciation rose to 2.8% in fiscal 2003 (ended March 31, 2004) from 1.7% the previous year, while funds from operations (FFO) are stabilizing after bottoming out in fiscal 2001. An increase in earnings from the once unprofitable electronic devices and information and communication systems segments has made a significant contribution to these recoveries. In view of the business restructuring measures taken by the company, as well as a recovery in market conditions in the electronic devices segment, Standard & Poor's believes the risk of another drastic deterioration in these two segments has decreased. Mitsubishi Electric's industrial automation systems segment is expected to
