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Pioneer, Hitachi Report Lower 1st Half Results

10/31/2007 09:41:00 AM Eastern

Tokyo — Pioneer Electronics and Hitachi both reported disappointing midyear results in their consumer electronics operations.

For its fiscal second quarter, ended Sept. 30, Pioneer reported a net loss of $20.8 million and a 79.6 percent drop in operating income to $8.2 million vs. the previous year’s second quarter. Consolidated operating revenue was up 6.3 percent to $1.74 billion mainly due to higher sales of car audio products and DVD drives for PCs and the weaker yen, Pioneer reported.

In the home electronics segment, sales were up 4.6 percent to $777.8 million with the operating loss for the quarter at $35.7 million. The main problem has been a decrease in plasma TV sales for OEM and business use, although Pioneer reported that “home-use sales rose slightly” but that was based on Europe with lower sales in North America and Japan. Sales of DVD drives for PCs rose, but sales of DVD recorders decreased.

In car electronics, sales increased 10.9 percent to $806.3 million mainly due to increased sales of both car audio products and car navigation systems. In North America, OEM sales of car navigation rose, the company reported. Operating income in this segment increased 7.9 percent year-on-year to $52.4 million.

In forecasting the balance of the fiscal year, Pioneer, which received an investment by Sharp earlier this year, has reduced its previous forecasts due to a larger-than-expected loss in home electronics due to plasma display sales. But it confirmed that it will consider adding LCD TVs to its lineup of smaller sizes than plasma with Sharp’s cooperation.

In plasma, where it introduced its high-end Kuro line earlier this year, Pioneer said it will continue to offer plasma displays “with high picture quality” and will offer “unique value propositions by enhancing combinations and links between plasma displays and other audio/video products.” Pioneer also said it will focus on Blu-ray Disc products and reiterated it will work with Sharp to “promote joint development in each business” in order to develop new products and businesses.

At Hitachi, its digital media and consumer products had 4 percent lower revenue to $6.33 billion for its fiscal first half, which ended Sept. 30. The segment’s operating loss was $442 million, $141.7 million more than the previous fiscal year’s first half.

Hitachi blamed overall segment revenues reflected in lower projection-TV sales due to greater demand to flat-panel TVs and lower sales of its mobile phone business, which had strong growth last year. The company cited the North American market for flat-panel TVs as having lower-than-expected sales and lower prices. Hitachi did say that there was growth in room air conditioners, commercial air products and washing machines.

In its report, Hitachi reiterated its effort to increase its market share by bring its 35mm ultra-thin LCD TV to the Japanese market by the end of the year. The company is concentrating production at its Miyazaki Works belonging to the plasma display panel production subsidiary Fujitsu Hitachi Plasma Display Limited.

Company-wide, Hitachi reported revenues of $45.9 billion for the half, up11 percent, and a net loss for the half of $108 million, a $565.2 billion improvement over last year’s fiscal first half.