Hitachi forecasts 18.5 pct rise in full-year profit, in line with estimates
TOKYO May 10 (Reuters) - Hitachi Ltd forecast an 18.5 percent jump in operating profit for this fiscal year, in line with expectations, as the electronics conglomerate reaps the benefits of a weaker yen while projecting a pickup in economic recovery both at home and abroad.
Hitachi, one of Japan's biggest companies with a $31 billion market capitalisation and more than 300,000 employees worldwide, said on Friday it expected an operating profit of 500 billion yen ($5.03 billion) for the year to March 31, 2014. That compared with a 524.8 billion yen average forecast by 21 analysts polled by Thomson Reuters I/B/E/S.
For the year that ended on March 31 of this year, Hitachi logged an operating profit of 422.03 billion yen, up 2.4 percent from the previous year.
Hitachi said it expected a recovery in its construction equipment division, which was hit last year by a slowdown in the key Chinese market. The division was seen posting an operating profit of 82 billion yen in the year to March, up from 54.6 billion yen in the previous year.
The company's biggest domestic rival, Toshiba Corp, said this week it expected a 34 percent jump in operating profit this financial year, supported by strong memory chip sales and a recovery in its nuclear power business.
Hitachi, which operates two nuclear power joint ventures with General Electric Co, announced last year that it would merge its thermal power business with Mitsubishi Heavy Industries Ltd to better compete against Toshiba and foreign rivals such as Siemens AG.
Shares in Hitachi have risen 28 percent since January, compared with a 40 percent rally in Tokyo's benchmark Nikkei average. Hitachi shares ended up 2.7 percent at 645 yen ahead of Friday's earnings announcement.
Hitachi said it was assuming exchange rates of 95 yen per dollar and 120 yen per euro for the current financial year.