Hitachi slides to $868 million loss in April-June

[July 28, 2009]  TOKYO (AP) -- Hitachi Ltd. posted Tuesday a group net loss of 82.67 billion yen ($868 million) for the April-June quarter, dragged deep into the red by persistent weak demand for its electronics products.

Hitachi, which produces everything from home appliances to medical equipment to nuclear reactors, had net profit of 31.6 billion yen during the same period a year earlier. It made headlines three months ago for booking a fiscal year loss of 787.3 billion yen -- the biggest ever annual loss by a Japanese manufacturer.

The company also announced plans to take over five publicly traded units through a tender offer.

The Tokyo-based company will buy the outstanding shares of Hitachi Maxwell Ltd., Hitachi Information Systems Ltd., Hitachi Systems & Services Ltd., Hitachi Software Engineering Co. and Hitachi Plant Technologies Ltd.

New management at Hitachi had suggested for months that Hitachi needed to reorganize and streamline its sprawling business.

Analysts expecting the move said the takeovers do little to change their bearish opinion on the company's outlook.

"The market consensus is that Hitachi needs to boost its capital, but there are no signs of measures to sell off non-core businesses that could provide a cash inflow, and ... its funding needs are set to swell," Hideyuki Maekawa, an analyst at Credit Suisse, said in a note to clients.

Credit Suisse has pegged Hitachi shares with its lowest "underperform" rating.

Hitachi's revenue for the three months through June 30 retreated 26 percent to 1.89 trillion yen. It booked an operating loss -- a measure of core business -- of 50.6 billion yen from 77.7 billion yen operating profit last year.

For the full fiscal year through March 2010, Hitachi continues to expect a 270 billion net loss on sales of 8.9 trillion yen.

Hitachi reports earnings based on U.S. accounting standards.

[Associated Press]

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