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Hitachi Q3 CE Segment Sales Flat, Takes Loss

2/02/2005 10:31:00 AM Eastern

Tokyo — Although the digital media and consumer products segment at Hitachi recorded higher sales of plasma TVs and LCD projectors in the company’s fiscal third quarter, overall segment sales essentially were flat in the three months, dropping about 1 percent, to $3.1 billion.

But with prices in the segment falling as a whole — as strong competition and narrowing demand for digital electronics, namely flat-panel TVs and DVD recorders, took its toll — the segment recorded a third-quarter operating loss of $16.4 million, down from operating income of $109 million in the same three months in 2003.

To compound Hitachi’s clouded profit picture, the company’s electronic device segment saw third-quarter revenue decline by 10 percent to $2.9 billion and operating income plummet 81 percent to $21.2 million, as sales of displays were sharply lower, due to a “sudden market turndown for LCDs.” Earnings in the display business moved downward due, in part, to falling sales prices.

For the nine months, the digital media and consumer products segment, mainly consumer electronics products, recorded a 6 percent increase in sales to $9.4 billion, while operating income declined 27 percent to $84.9 million.

Sales in the electronic device segment for the nine months rose 5 percent to $9.6 billion, while operating income jumped 108 percent to $311.6 million.

Overseas sales to North America moved up 4 percent in the third quarter, ended Dec. 31, reaching $2.3 billion, while the increase slipped to 3 percent for the nine months, at $6.6 billion.

Weakening demand for digital-related products and a slower rate of growth in consumer spending, including softening sales of digital consumer products was the backdrop for a 4 percent rise in third-quarter consolidated revenue at Hitachi, to $20.5 billion.

Consolidated third-quarter operating income decreased 46 percent to $330.9 million, in part, due to worsening earnings for LCDs and the CE segment’s operating loss. Net income was flat at $256.6 million.

For the nine months, consolidated Hitachi revenue climbed 6 percent to $62.3 billion. Operating income rose 94 percent to $1.6 billion, and net income increased more than sevenfold, to $654 million.