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Japan's Hitachi Forecasts Wider Fiscal Loss

The Associated Press

Hitachi, which makes everything from home appliances to medical equipment, already had been expecting its worst ever net loss of 700 billion yen as a global slump squelches demand.

The 788 billion yen of red ink would be the worst annual loss for a Japanese manufacturer, according to Shinko Research Institute. It would be the second-largest in Japanese corporate history after an 834.6 billion yen loss reported by telecommunications giant Nippon Telegraph and Telephone for the fiscal year ending March 2002, Shinko said.

Hitachi said in a statement it was forecasting a wider loss because the global slowdown will result in its business being smaller and the tax refunds it had factored into its books also would be smaller.

Hitachi also lowered its sales forecast for the fiscal year ending March 31 to 10 trillion yen from the previous projection of 10.02 trillion yen. Hitachi reports earnings Tuesday.

Hitachi, which has already announced it will slash 7,000 jobs, or nearly 2% of its global work force, had a 58.1 billion yen loss and 11.2 trillion in sales for the previous fiscal year ending March 2008.

The Tokyo-based company said virtually every area in its sprawling business has been battered by the global downturn. An appreciating yen, which erodes the value of overseas earnings, also has hurt results.

Demand has plunged in a wide range of Hitachi's operations, including computer chips, software services, electric power systems, digital disks, auto parts and fine metals, according to the company. The U.S. financial crisis has squelched demand not only in industrialized nations but also in China and other developing markets.