Hitachi Reports Worst Manufacturing Loss on Record

 

Japanese electronics maker Hitachi Ltd. said Thursday its loss for the fiscal year ended March will be bigger than its previous forecast, ballooning to 788 billion yen ($8 billion) after writing down the value of tax refunds it expects.

Hitachi, which makes everything from home appliances to medical equipment, had already 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 Co. 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 Corp. for the fiscal year ending March 2002, Shinko said.

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

Hitachi has named Takashi Kawamura, 69, who heads two of its subsidiaries — Hitachi Plant Technologies Ltd. and Hitachi Maxwell Ltd. — as its incoming president, chief executive and chairman, a move that will become official late June.

5/6/2009 11:45 PM YURI KAGEYAMA AP Business Writer TOKYO