Hitachi posts profit on hard drives, keeps outlook

TOKYO, July 31 (Reuters) - Japan's Hitachi Ltd (6501.T) swung to a quarterly profit on Thursday, as yields from its hard drives and power systems outweighed flat TV losses, but it kept its annual outlook that is short of market consensus.

Japan's biggest industrial electronics company earned a net profit of 31.56 billion yen ($292.4 million) in April-June, up from a 13.62 billion yen loss in the same period the previous year.

Hitachi kept its forecast for the year to March 2009 at 40 billion yen, up from a loss of 58.13 billion yen the previous year but which falls far short of a market consensus of 61.5 billion yen by 14 analysts polled by Reuters Estimates.

The world's No.3 maker of hard drives after Seagate Technology STX.N and Western Digital Corp WDC.N is fighting a price war in notebook hard drives by cutting costs to make its magnetic head technology profitable.

The group, which remains tied to losses on its flat TVs, is also chasing orders for nuclear and thermal reactor plants at home and abroad for long-term growth.

Shares at Hitachi have gained 29 percent since the start of the business year in April through Wednesday, outperforming a 7 percent rise in the Tokyo stock exchange's electrical machinery subindex .IELEC.T. (Reporting by Mayumi Negishi; Editing by Lincoln Feast)