Hitachi to launch $2.9bn bid for 5 units
Tokyo, July 28, 2009
Hitachi said on Tuesday it will launch a $2.9 billion bid for five of its listed units to help it return to a profit, even as it tumbled to a quarterly net loss amid weak microchip and consumer electronics sales.
Japan's biggest electronics maker is trying to consolidate its sprawling operations as it faces its third straight year of losses.
It is trying to focus on growth areas in power systems and infrastructure, while mounting losses eat away at its finances.
The company is eyeing a boost from public funds, even as rivals Fujitsu and NEC Corp predict a return to profit, while a planned merger between NEC Electronics and Hitachi's joint venture with Mitsubishi Electric next year could force it to shoulder further restructuring costs.
Hitachi stuck to its forecast for a net loss of 270 billion yen for the year to March, which misses the consensus average for a 246 billion yen loss by 13 analysts polled by Thomson Reuters and would further eat into Hitachi's weakened capital.
The company reported a loss of 82.7 billion yen ($870.5 million) in April-June, its fiscal first quarter, down from last year's profit of 31.6 billion yen and just missing an estimate for a loss of 79.9 billion yen by JP Morgan.
It posted an operating loss of 50.6 billion yen, down from a profit of 77.7 billion yen last year, on a 26 per cent sales decline.
Sharp cuts worldwide in corporate spending have hurt Hitachi's cash cows such as Hitachi Metals, Hitachi High Technologies and Hitachi Chemical, while the parent company is struggling to restructure its chip and consumer electronics operations.
Hitachi shares rose 13 per cent in April-June, underperforming a 25 per cent rise in Tokyo's electrical machinery sub-index.
Its shares were down 2.6 per cent on Tuesday, against a 1.3 per cent fall on the index. – Reuters