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Hitachi registers 27% jump in quarterly operating profit
Japan's Hitachi, whose products range from consumer electronics to nuclear reactors, posted a 27 per cent rise in quarterly operating profit on its hard drives, IT systems, elevators and construction equipment.
- Reuters
- Published: 23:41 February 5, 2008
Tokyo: Japan's Hitachi, whose products range from consumer electronics to nuclear reactors, posted a 27 per cent rise in quarterly operating profit on its hard drives, IT systems, elevators and construction equipment.
But while that prompted Hitachi to raise its full-year operating outlook slightly, costs to turn around its loss-making flat TVs will weigh on net profit, it said.
Hitachi, whose businesses are split into booming infrastructure-related operations and slumping core electronics, has been struggling to slim down its sprawling empire and better translate its cutting-edge research into profits.
Reorganisation
It is now studying ways to reorganise its overseas flat TV personnel, realign distribution channels and decide what to do about excess inventory, senior vice-president Toyoaki Nakamura told a news conference.
Restructuring on flat TVs would mean a roughly 30 billion yen cost for the full year, dragging down the company's outlook for the entire digital media segment to a 98 billion yen loss, he said.
Hitachi's strategy of focusing on big 50-inch class TVs has backfired, he said.
Hitachi competes in flat TV markets controlled by bigger rivals Sony, Samsung and Matsushita. The company raised its operating profit forecast for the year through March to 300 billion yen from 290 billion yen. But it lowered its net profit estimate by 75 per cent to 10 billion yen, citing restructuring costs for flat TVs and tax costs for its high-profit construction equipment businesses.
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