TOKYO (Reuters) - Hitachi Ltd (6501.T), Japan’s biggest electronics maker, warned of a record $7.8 billion annual loss, hit by slumping sales, a stronger yen and costs to restructure its sprawling operations.
Hitachi, the world’s No.3 maker of hard drives, said it would exit unprofitable businesses, close plants and take other restructuring steps in a bid to cut 200 billion yen in fixed costs by March 2010.
“Since last November, economic conditions surrounding our company have kept deteriorating at an unprecedented speed,” Hitachi Chief Executive Kazuo Furukawa told a news conference on Friday.
The company now expects a net loss of 700 billion yen ($7.8 billion) for the year to March 31, instead of a previously projected 15 billion yen profit, joining a long list of Japanese firms hit by the double whammy of global recession and a firmer yen, including Sony Corp (6758.T) and Toshiba Corp (6502.T).
Hitachi’s automotive components business was battered by slumping car sales worldwide, while its flat TV operations suffered from steep price falls amid fierce competition and anemic demand.
Hitachi cut its operating profit forecast by 90 percent to 40 billion yen, reflecting a downturn across most of its major business lines including construction equipment unit Hitachi Construction Machinery Co (6305.T).
The sprawling electronics conglomerate said it was also forced to write down deferred tax assets following a dramatic fall in taxable income across the group. It estimated that adjustment would boost its taxes by about 140 billion yen.
Hitachi, with group employees of about 400,000, said it plans to cut workers as part of its restructuring measures, but did not specify the size of the job cut.
Shares of Hitachi closed down 6.7 percent at 294 yen before the announcement, while the benchmark Nikkei average .N225 lost 3.1 percent.
Reporting by Kiyoshi Takenaka; Editing by Michael Watson