Feeds

Hitachi earnings hit hard in Q4

Blames Japanese tsunami and Thai flooding

Boost IT visibility and business value

Japanese conglomerate Hitachi – which derives a fair portion of its sales and profits from the IT and telecom sectors – has taken it in the chin profit-wise in its third quarter of fiscal 2011 ended in December. For the quarter, sales were essentially flat at ¥2,2665bn ($29bn), but net income fell by 42.3 per cent to ¥46.4bn ($595m).

In a statement (PDF), Hitachi said that both its Automotive Systems division and its Information & Telecommunication Systems division had revenue growth thanks to the recovery in Japan in the wake of the earthquake and tsunami that hit last March. However, Hitachi's consumer and media product sales and its Power Systems division have not recovered after the quake and tsunami, and the company's PC and display business have been adversely impacted by the disk shortages following the continued flooding in Thailand, where about a quarter of the world's disk drives are manufactured.

In the Information & Telecommunications Systems division, Hitachi posted sales of ¥407.6bn ($5.23bn), an increase of 5 per cent over the prior fiscal year's third quarter. This unit booked an operating profit of ¥18.9bn ($243m), up only four-tenths of a point compared to Q3 fiscal 2010. Hitachi said that I&TS sold more gear and services to telco operators in Japan as well as more software and services for its venerable storage arrays in the quarter. The telco sales were the main reason the operating profit grew. Hitachi sold ¥11.2bn in servers, ¥6,2bn in PCs, ¥38.1bn in telco gear, and ¥50.4bn in storage products in the fiscal third quarter. This unit had ¥226.4bn in services sales and ¥42bn in software sales in fiscal Q3.

Hitachi's Components & Devices division, which still has a disk drive business until the deal to sell it for $4.3bn to Western Digital closes, posted sales of ¥197.2bn ($2.53bn), up 2 per cent. Operating profits hit ¥15.6bn ($200m), up 2.3 per cent from the year-ago period.

Looking ahead, Hitachi is expecting that its sales for fiscal 2011 ending in March will come to ¥9,500bn ($126.7bn), up 2 per cent over fiscal 2010. Net income is expected to fall by 38.8 per cent to ¥200bn ($2.67bn). Hitachi is projecting for the Information & Telecommunication Systems division will post sales of ¥1,700bn, up 3 per cent, and an operating profit of ¥100bn, down 9.1 per cent, for the full year. The Components & Devices division is projected to post ¥710bn in sales – down 8.1 per cent, but still better than the ¥630bn in sales it was forecasting three months ago. Operating profits for Components & Devices is forecast to rise to ¥37bn, better than the ¥29bn in the prior forecast but still well off the ¥54.7bn Hitachi was able to rake in as operating profits from disks and components in fiscal 2010. ®

Maximizing your infrastructure through virtualization

More from The Register

next story
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.