Hitachi posts loss but sees growth
Thursday, May 17, 2007
HITACHI Ltd said yesterday it swung into loss in the last financial year under pressure over falling electronics prices and faulty turbines, but said it still did better than expected.
The Japanese electronics giant said the fall was one-off and predicted to be back in black in the current year.
Hitachi shares rallied on the data released an hour before the closing bell, finishing up 2.05 per cent at ¥897 ($11.3) despite a stagnant overall market.
In the last financial year, Hitachi said it posted a net loss of ¥32.8 billion (US$270 million), reversing a net profit of ¥37.8 billion a year earlier.
Operating profit dropped 28.7 per cent to ¥182.51 billion, although revenue was up 8.3 per cent to ¥10.25 trillion.
The company paid during the year to repair faulty turbines supplied to two nuclear power stations in Japan operated by Chubu Electric Power and Hokuriku Electric Power.
It also blamed its slump on falling prices of flat-screen televisions and sluggish sales of air conditioners, which together amounted to a ¥58.4 billion loss, and losses in hard disk drive production.
"Due to the booking of one-off charges for turbine troubles and unprofitable overseas plant projects, the operating profit dropped," Hitachi Chief Financial Officer Toyoaki Nakamura said.
"Unabated declines in selling prices of digital consumer products such as flat TVs and DVDs also kept a lid on profitability," Nakamura said.
But he said operating profit was about ¥2.5 billion higher than the earlier projection and net loss some ¥22.3 billion smaller than thought.
Hitachi benefitted from strong growth overseas, with sales rising 14 per cent in China, outpacing the five per cent rise in Japan.
For the next fiscal year, Hitachi expects net profit of ¥40 billion as the electronics firm joins hands with General Electric in its nuclear energy business and cuts costs elsewhere.
"By focusing our resources on large-screen TVs as well as on the North American and Japanese markets, while pushing for cost cuts, we aim to turn around the flat TV business in the current fiscal year," said Nakamura.AFP
The Japanese electronics giant said the fall was one-off and predicted to be back in black in the current year.
Hitachi shares rallied on the data released an hour before the closing bell, finishing up 2.05 per cent at ¥897 ($11.3) despite a stagnant overall market.
In the last financial year, Hitachi said it posted a net loss of ¥32.8 billion (US$270 million), reversing a net profit of ¥37.8 billion a year earlier.
Operating profit dropped 28.7 per cent to ¥182.51 billion, although revenue was up 8.3 per cent to ¥10.25 trillion.
The company paid during the year to repair faulty turbines supplied to two nuclear power stations in Japan operated by Chubu Electric Power and Hokuriku Electric Power.
It also blamed its slump on falling prices of flat-screen televisions and sluggish sales of air conditioners, which together amounted to a ¥58.4 billion loss, and losses in hard disk drive production.
"Due to the booking of one-off charges for turbine troubles and unprofitable overseas plant projects, the operating profit dropped," Hitachi Chief Financial Officer Toyoaki Nakamura said.
"Unabated declines in selling prices of digital consumer products such as flat TVs and DVDs also kept a lid on profitability," Nakamura said.
But he said operating profit was about ¥2.5 billion higher than the earlier projection and net loss some ¥22.3 billion smaller than thought.
Hitachi benefitted from strong growth overseas, with sales rising 14 per cent in China, outpacing the five per cent rise in Japan.
For the next fiscal year, Hitachi expects net profit of ¥40 billion as the electronics firm joins hands with General Electric in its nuclear energy business and cuts costs elsewhere.
"By focusing our resources on large-screen TVs as well as on the North American and Japanese markets, while pushing for cost cuts, we aim to turn around the flat TV business in the current fiscal year," said Nakamura.AFP
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