Hitachi cuts loss forecast, stimulus spending helps

Hitachi cuts loss forecast, stimulus spending helps

Tokyo: Electronics conglomerate Hitachi Ltd reduced its annual net loss forecast by 15%, bringing it nearer market expectations, with the firm citing a recovery in emerging markets, government spending and cost cuts.

Hitachi, a sprawling conglomerate with more than 900 group firms, has been working to narrow its focus and slash costs as it heads for its fourth straight annual loss, hurt by its struggling consumer electronics and semiconductor operations.

It said it now expects to post a net loss of 230 billion yen in the year to March 2010, against its prior forecast for a loss of 270 billion yen and closer. The new figures is closer to the consensus estimate of 218 billion yen in a poll of 14 analysts by Thomson Reuters I/B/E/S.

Hitachi said in a statement that the improved outlook was due to economic stimulus spending by governments around the world, an economic recovery in China and other emerging markets, and its own cost-cutting efforts.

The company more than doubled its operating profit projection for the year to 80 billion yen from 30 billion yen.

For the first half of the year, Hitachi said it estimated that it would post an operating loss of 25 billion yen, better than the 110 billion yen loss it forecast previously.

Hitachi is due to report its results for the second quarter and the half year that ended on 30 September on Thursday.

Restructuring efforts in divisions such as digital media and consumer products helped it return to an operating profit in the second quarter, Hitachi said.

Ahead of the announcement, shares of Hitachi closed up 2.1% at 299 yen. ($1=91.71 Yen)