* Q3 loss 371 bln yen on weak chip, auto, TV ops
* Reiterates 700 bln yen net loss for year to March
* Shares close up 6.2 pct before results (For a related factbox, click on [ID:nT327790]) (Adds company comments, details)
By Sachi Izumi
TOKYO, Feb 3 (Reuters) - Hitachi Ltd (6501.T), Japan’s biggest electronics maker, posted a quarterly loss on struggling chip operations and a slump in demand for electronics products, and reaffirmed its forecast for a $7.8 billion annual loss that would be the biggest ever by a Japanese manufacturer.
The global recession is choking most of Hitachi’s sprawling operations, with slumping car sales hurting its auto parts business, and its flat-TV division hit by steep price falls in a fiercely competitive market.
Another big headache is its 55 percent-owned semiconductor affiliate Renesas Technology, which has been battered by poor demand for chips used in cars, TVs, cameras and hard drives. The rest of Renesas is owned by Mitsubishi Electric Corp (6503.T).
Hitachi has said it will exit unprofitable businesses, close plants and take other restructuring steps in a bid to cut 200 billion yen in fixed costs by March 2010. [ID:nT249327] “It’s hard to foresee the future these days, and the only thing we can do in such times is to cut fixed costs and try to generate cash flow,” Hitachi Senior Vice President Toyoaki Nakamura told a briefing.
“We are bringing forward our restructuring efforts in the hope that these will bear fruit from the first quarter that starts in April.”
Hitachi booked a net loss of 371 billion yen ($4.13 billion) for October-December against a 12.5 billion yen profit a year earlier. The result was also dented by a firmer yen and a writedown of deferred tax assets after taxable income fell across the group.
It generated 42 percent of revenue overseas in the quarter.
The company reported an operating loss of 14.5 billion yen for October-December after posting a profit of 77.9 billion yen a year earlier. Sales fell 16 percent to 2.3 trillion yen.
Hitachi, whose products range from rice cookers to nuclear reactors, repeated its projection for a net loss of 700 billion yen for the full business year to March.
It sees an operating profit of 40 billion yen.
For a graphic on the biggest losses in corporate Japan click here: here
In the restructuring steps announced with the outlook cut on Friday, Hitachi also plans to reduce its work force, especially in the struggling auto, TV and digital media segments, while cutting the number of its subsidiaries and executives’ pay and bonuses.
Nakamura declined to give the size of the executive pay cut but said it will be substantial. “I’d say it’s pretty big,” he said about the size of the reduction. “I think my life will be tough.”
The loss warning on Friday triggered a 17 percent dive in Hitachi shares to a near 29-year low on Monday, adding to a 50 percent slide since the beginning of the business year last April. [ID:nT306885]
The electronics machinery subindex .IELEC.T has tumbled 46 percent since April.
Hitachi shares ended up 6.2 percent on Tuesday before the results, against a 1.9 percent gain in the subindex. ($1=89.75 Yen) (Editing by Michael Watson)