Electronics maker Hitachi Ltd. posted the worst annual loss for a Japanese manufacturer and doesn’t expect the global economy to recover until next year at the earliest.
Battered by plummeting demand for cars and gadgets, Hitachi, which produces everything from home appliances to medical equipment, said Tuesday it booked a net loss of ¥787.3 billion for the fiscal year through March. That compares with last year’s ¥58.1 billion loss.
Annual revenue tumbled 11 percent to ¥10 trillion. But it managed an operating profit — which reflects its core business — of ¥127 billion for the year.
Hitachi’s net loss represents the worst annual loss for a Japanese manufacturer, according to Shinko Research Institute Co. It would be the second-largest in Japanese corporate history, after an ¥834.6 billion loss reported by telecommunications giant Nippon Telegraph and Telephone Corp. for the business year that ended in March 2002.
The company expects the pain to continue, forecasting a ¥270 billion net loss this year.
“The global economy . . . is not expected to see a full-fledged recovery until 2010 at the earliest,” Hitachi said in a statement. “The global economic outlook is being shaped by concerns about the U.S. and other industrialized nations slipping into negative economic growth, and about slowing economic growth in emerging economies and the yen’s appreciation.”
As part of its turnaround efforts, Hitachi has already announced it will slash 7,000 jobs, or nearly 2 percent of its global workforce.
Hitachi reports earnings based on U.S. accounting standards.
NEC falls out of black
NEC Corp. said Tuesday it fell into the red last business year because of restructuring costs and stock losses from the economic downturn, but the electronics giant expects to return to a modest profit this year.
The firm recorded a group net loss of ¥297 billion for the 12 months through March, down sharply from last year’s net profit of ¥22.7 billion.
NEC blamed growing restructuring costs such as payment for early retirement for employees. The firm said it also had to book an extraordinary loss from declining market values in investment securities.
Annual sales fell 8.7 percent to ¥4.2 trillion.
The company booked an operating loss of ¥6.2 billion, compared with a profit of ¥156.8 billion a year earlier.
“The rapid economic decline and subsequent decrease in demand during the second half, particularly in the electron device business, resulted in sales declines throughout all business segments,” the Tokyo-based company said in a statement.
NEC said it has made efforts to improve profitability through manufacturing renovations and staffing adjustments. It has also decided to withdraw from the overseas personal computer business “in the face of the ongoing business slump and intensifying competition.”
For the business year through March 2010, NEC expects to make a profit of ¥10 billion on a sales forecast of ¥3.7 trillion, down 11 percent.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.