TOKYO Feb 4 Japan's Hitachi Ltd cut
its full-year profit outlook by about 13 percent on Monday to
420 billion yen ($4.5 billion), citing a weak economic recovery
in Europe and a slowdown in emerging markets.
The sprawling firm, which is cutting costs and trying to
push into growth areas such as infrastructure, posted a 28
percent fall in its third-quarter operating profit, well below
market forecasts for a small rise.
"The business environment facing our company is likely to
stay unclear, including not only a prolonged European economic
struggle but also a slowdown in growth in emerging markets,
including China and India," Hitachi said in a statement
The company, whose products range from lightbulbs to nuclear
plants, pointed in particular to a likely slow pickup in global
demand for its electronics business, including semiconductors.
Hitachi logged an operating profit of 68.3 billion yen in
the October-December quarter, down from 95.1 billion yen last
year, and below an average forecast for a 98.3 billion yen
profit according to Thomson Reuters I/B/E/S.
Hitachi said it was hurt by a fall in profit at its
construction machinery operations as well as its high functional
materials and components operations.
Japan's biggest industrial electronics firm has been
overhauling its empire of some 900 firms since reporting one of
the largest losses in Japanese corporate history.
"We have been working for three years to change our system
to step out of losses, and this business year we were able to
achieve much of that," Executive vice president Toyoaki Nakamura
told a briefing.
Hitachi bought a British nuclear project for $1.1 billion in
October as it seeks markets outside Japan and plans to merge its
thermal power business with that of Mitsubishi Heavy Industries
Ltd in a bid to gain scale.
Hitachi and its domestic competitors lag overseas rivals in
profitability. Hitachi has an operating profit margin below 5
percent, while Toshiba Corp is at 3.3 percent and
Mitsubishi Electric Corp is at 5.6 percent.
Overseas counterparts such as General Electric Co and
Siemens AG boast profit margins of 12.2 percent and
Shares in Hitachi ended up 4.0 percent on Monday, compared
with a 0.6 percent rise on Tokyo's Nikkei benchmark average