Only 2 Billion More To Lose At Hitachi – US-FOREX.US
Its revenue withering, Japan’s Hitachi is struggling to stem losses that will push the sprawling electronics and machinery conglomerate to a bigger net deficit than it has forecast unless it can slow the pace of losses it accumulated in the first three months of its business year.
Hitachi
, which makes everything from nuclear power plants and escalators to beard trimmers and televisions, is better at making machines than money. In the three months ended June 30, the Japanese corporation lost 870 million, almost a third of the 2.9 billion deficit it expects to post for the whole business year. In the previous 12 months it lost almost 8 billion, the biggest loss ever by a non-financial Japanese company.
The company, which operates more than 900 subsidiaries, has promised to pare weaker business units in a bid to slash more than 5 billion off costs.
So far, however, compared with a year ago it has trimmed its payrolls by less than 5,000 people representing 1.2% of its workforce. In Japan it has added 2,051 workers, withdrawing into its domestic market as it was lashed by the global recession. But Hitachi sales are falling abroad and at home: Overseas revenue dipped by 31% in the quarter, compared with a smaller 21% fall in domestic sales.
Hitachi also believes in spending cash to save money. In what it says will help eliminate overlapping costs, it is ready to fork out some 3 billion to buy up shares of several listed subsidiaries it doesn’t already own, including Hitachi Maxell and Hitachi Software Engineering.
Investors so far have been unimpressed. Since the start of business year the company’s stock has contracted 50%, compared with a smaller 20% dip in the Nikkei 225 benchmark index.