Hitachi posts biggest loss

Hitachi, a sprawling conglomerate that makes everything from refrigerators to televisions and even nuclear power systems, logged a net loss of 787.3 billion yen ($8.1 billion) for the year to March.

The electronics and engineering firm, which is slashing up to 7,000 jobs, said it expects a net loss of 270 billion yen for the current business year with little hope of recovery until 2010 at the earliest.

The company expects “very severe” economic conditions to continue in the first quarter of the current fiscal year, vice president Takashi Miyoshi said.

The loss is the largest ever suffered by a Japanese manufacturer and the second biggest in Japanese corporate history behind telecom giant NTT’s loss of about 835 billion yen in 2002, according to analysts.

NEC Corp. meanwhile reported a net loss of 296.6 billion yen for the year to March.

“The very severe situation will continue due to a decline in IT investment,” NEC senior vice president Takao Ono said.

Unlike Hitachi, NEC expects to return to the black in the current business year to March, predicting a net profit of 10 billion yen.

Japan’s high-tech giants have been badly affected by the global economic slowdown, which has pushed down demand for their products and sent the yen soaring, eroding export earnings.

Hitachi said its operating profit plunged 63.2% to 127.15 billion yen last year and revenue fell 11% to 10.0 trillion yen, hit by weak demand for semiconductors and industrial equipment.

To survive fierce global competition in semiconductors and electronics, Hitachi, like rivals such as Toshiba, is focusing more on other areas such as nuclear power generation and renewable energies.

“The energy and environmental businesses are going to increase, so we would like to focus our resources on them,” said Miyoshi.

Hitachi said in March that it was replacing its president and splitting off two key businesses.

The group will hive off its auto systems business, which makes products including rechargeable lithium-ion batteries, and the consumer electronics arm, which includes flat-panel televisions, into separate companies in July.

Other Japanese electronics makers have also been badly hit as consumers stop buying televisions and other electronic goods.

Sony, which is due to announce its annual results on Thursday, has forecast its biggest ever operating loss of 260 billion yen for the financial year which ended in March.

Chief executive Howard Stringer is slashing 16,000 jobs and axing plants in an effort to return the company to the black.

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Hitachi posts biggest loss