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Hitachi CE Segment Sales Drop 11%

7/28/2005 12:58:00 PM Eastern

Tokyo — Lower sales prices for flat-panel televisions, including plasma TVs, due to tougher marketplace competition, chewed into fiscal first-quarter sales at Hitachi, with the company’s digital media and consumer products segment, mainly consumer electronics, reporting an 11 percent decline in revenue, down to $2.7 billion from a year-earlier $3 billion.

The digital media and consumer products segment reported a $74 million operating loss in the first quarter, ended June 30, compared with $46.6 million in operating income for the same three months the previous year, reflecting falling sales prices for plasma and other flat-panel TVs.

In Hitachi’s electronic devices segment, first-quarter sales dropped 19 percent, reaching $2.5 billion, from $3 billion in the year-on-year period. The decrease was due to lower revenue in the display business because of sluggish sales of small- and medium-sized LCDs for mobile phones and other uses.

Operating income in the electronic devices segment dipped 71 percent, down to $43 million from a year-ago $145.5 million. The slide was due, in part, to poor earnings in the display business caused by falling prices and other factors.

Revenue in Hitachi’s North American market was flat at nearly $2 billion.

Consolidated revenue in the first quarter also was flat, at about $18.4 billion, down slightly from the previous year. Operating income dropped 97 percent year-over-year, to $12 million from a year-ago $335.5 million, while the company reported a net loss of $217 million, compared with net income of $142.8 million in the same quarter last year, as slumping sales of CE products and telecommunications equipment took its toll.

Hitachi said it continues to have problems with falling prices for CE products and for competitive products that can be sold more cheaply.