Japanese electronics giant, Hitachi Ltd, has halved its group net profit forecast for the remainder of its business year to March 31, next year, citing intense price competition and a cripplingly strong yen. Hitachi, which will unveil its medium-term business strategy on Friday, said it now expects to post a consolidated net profit of 35bn yen ($330m) for 1999/00, compared to the previously-forecast 70bn yen ($670m).
The Tokyo-based combine said customer apprehension about the year 2000 computer bug had hit sales of PCs and peripheral products harder than it had expected, alongside stiff price competition. On top of this, a higher yen had a negative impact on our profit, Hitachi added in a statement. The company projected consolidated revenue would come in at 7.8 trillion yen ($78bn), below an earlier forecast of 8 trillion yen ($80bn).
Nevertheless the downgraded earnings expectations represent a turnaround from the 338.7bn yen ($3.39bn) loss across operations, posted by Hitachi for fiscal 1999 – its worst-ever financial results. Since then, the company has instigated a broad-based restructuring plan, which included the closure of several semiconductor production sites, a cut in parent-company payrolls, and the sale of its silicon wafer division to Shin-Etsu Chemical Co Ltd. Friday’s planned announcement will include group financial target for the year 2002-3, and measures on how it will achieve future goals. á
