Hitachi Projects Net Loss; Flat-Panel TV Is Blamed

-- TWICE, 3/14/2008 9:25:00 AM

Tokyo — Hitachi reported today it is projecting a net loss for its fiscal year, ended March 31, due to problems with in its flat-panel TV business.

In its consolidated business forecast the company now expects a $680.7 million loss as compared with its previous forecast of a profit of $97.3 million. It would be the company’s second consecutive annual loss.

In its digital media and consumer products segment, responsible for consumer electronics, Hitachi now expects an operating income loss of $1.09 billion. Its original forecast was a $953 million loss.

Hitachi said the reasons for the problems in this segment reflect “three main factors in the flat-panel business: A protracted decline in market prices, especially in respect of old models; non-attainment of sales targets for large-screen models,” and structural business expenses which include “an accelerating of inventory disposal, in line with efforts to rebuild the sales framework.”

For similar reasons, Pioneer last week announced it was ending production of its own plasma panels.

Earlier, Hitachi announced a change in strategy for its TV operations that has the company focusing on high-end, super-thin products that can derive higher profit margins.

Hitachi said it plans to book “business-structural-reform-related expenses” of about $544 million, primarily from its flat-panel TV business. This figure includes a $148.9 million loss on plasma display panel production facilities at the second plant of the Fujitsu Hitachi Plasma Display’s Miyazaki Works in the first half and a “planned additional impairment loss” in the second half of about $340.4 million on the same works’ third plant.