Mitsubishi Electric Corp. cut its profit forecasts for the second time this year on slumping spending by car and flat-panel manufacturers and losses at its chip affiliate, the company said Monday.

Net income will probably decline 94 percent to ¥10 billion in the year to March 31 from a year earlier, the maker of consumer electronics and factory machinery said.

The company in October had forecast ¥120 billion in profit.

The company predicted its lowest net income in six years and reduced its profit and sales projections for the second time this fiscal year as demand for manufacturing gear slumps amid the global recession. The earnings will also be affected by record losses at Renesas Technology Corp., a chip maker 45 percent owned by Mitsubishi Electric.

"Demand is likely to decline until the second half of next fiscal year," Executive Vice President Yukihiro Sato said at a briefing in Tokyo. "The recovery will probably come in the January-to-March period and is unlikely to be a speedy one."

The company will cut 500 temporary workers, Sato said, without elaborating.

Operating profit, or sales minus the cost of goods sold and administrative expenses, will fall 55 percent to ¥120 billion this fiscal year, as revenue dips 11 percent to ¥3.6 trillion, Mitsubishi Electric said. The company previously forecast ¥220 billion in operating income on ¥3.9 trillion in revenue.

Mitsubishi Electric had a net loss of ¥28.3 billion in the three months that ended Dec. 31, compared with income of ¥42.3 billion a year earlier.