TOKYO Feb 4 Hitachi Ltd, Japan's
largest electronics conglomerate, raised its full-year earnings
forecast on Tuesday, putting it on course to break through a
23-year-old profit record as the automotive and construction
sectors boosted its earnings.
The company also said it was confident about demand from
China and the United States, shrugging off increased investor
concern over growth in the world's two top economies.
"If there's a hard landing in China, it will be felt in
Europe, the U.S. and Asia, so I think at the G20 and elsewhere
there will be efforts to make sure this doesn't happen," Hitachi
Executive Vice President Toyoaki Nakamura told an earnings
He also dismissed worries about the U.S. economy, which was
hit by unusually cold weather last month and faces a tapering of
the Federal Reserve's quantitative easing.
"We don't think there are any major problems," he said.
"U.S. consumption accounts for 70 percent of GDP so when
sentiment turns negative, corporate activity can't really be
positive, but it doesn't seem to be that bad."
Hitachi, a sprawling industrial group that is one of Japan's
largest private-sector employers, now projects an operating
profit of 510 billion yen ($5.04 billion) for the year to
end-March, up from its previous outlook of 500 billion yen and
exceeding its 1990/91 record of 506.4 billion.
The new forecast remains below the average estimate of 526.9
billion yen from 20 analysts, according to Thomson Reuters
StarMine, but Nakamura said it was a conservative outlook, and
it may be increased further.
Hitachi also posted a 79 percent rise in October-December
operating profit to 122 billion yen, powered by strong sales of
automotive components and construction equipment.
The upbeat result mirrored strong results the same day from
Panasonic Corp, which has been restructuring to ditch
unprofitable consumer businesses and focus on more lucrative
work supplying automakers and other industrial customers.
Hitachi racked up nearly 1 trillion yen ($10 billion) in
accumulated net losses in the four business years from 2007/08
to 2009/10 before embarking on a drastic reorganisation to
improve its profitability.
Hitachi's shares slid 4.8 percent before the earnings
announcement to 749 yen, in line with a 4.2 percent drop in
Japan's benchmark Nikkei average. The shares are up
nearly 50 percent since the start of last year, outperforming
the Nikkei's 35 percent gain but short of Panasonic, which has
more than doubled.