Hitachi, NEC and Toshiba in first quarter loss, Fujitsu shines

Japan's top electronics conglomerates Hitachi Ltd, Toshiba Corp and NEC Corp posted quarterly losses on price falls in chips and flat panels, but fourth-ranked Fujitsu Ltd swung to a profit on brisk demand for disk drives. Fujitsu, Hitachi and Toshiba stood by their full-year forecasts for profit growth, counting on an earnings recovery in the second half. Only NEC stuck with its earlier prediction that earnings will fall 12 percent.
Electronics conglomerates make consumer products but also operate infrastructure-related businesses such as power plants and computer systems integration for the public sector. This means sales tend to concentrate in the final fiscal quarter.
"The underlying business environment is not that bad. With consumer spending gradually recovering, sales of digital electronics are likely to be expanding in the second half," Toshiba Corporate Senior Executive Vice President Sadazumi Ryu told a news conference.
An unfavourable comparison with the year-earlier period is expected as demand for digital electronics products and their key components such as microchips surged in the April-June period last year in the run-up to the Athens Olympic Games.
Hitachi, a sprawling giant with products ranging from nuclear reactors to plasma panels, swung to a quarterly loss, hit by its struggling disk drive operations. A steep price erosion in chips weighed on quarterly earnings at Toshiba and NEC, the second- and third-largest electronics conglomerates.
Fujitsu bounced to a quarterly profit, thanks to strong demand for cellphones, mobile phone base stations for high-speed third-generation (3G) network, and hard disk drives used in personal computers and servers.
Hitachi bought International Business Machines Corp's disk drive operations in late 2002 for $2.05 billion, and has targeted the unit as one of its core businesses.
Sharp prices falls in flat panels such as plasma display panels also hurt its quarterly earnings.
Hitachi posted a net loss of 24.08 billion yen in April-June, against a 16.04 billion yen profit a year earlier. Fujitsu earned a net profit of 2.5 billion yen in the quarter, in a turnaround from an 11.84 billion yen shortfall a year before.
NEC swung to a quarterly loss on a steep slide in sales of chips used in mobile phones and digital electronics.
Net loss totalled 10.99 billion yen in the first quarter in a reversal from a 20.95 billion yen profit a year earlier.