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Weak demand pushes Hitachi to a loss

HITACHI Ltd posted a loss of 82.67 billion yen (US$868 million) for the April-June quarter, dragged deep into the red by weak demand for its electronics products.

Hitachi, which produces everything from home appliances to medical equipment to nuclear reactors, had a net profit of 31.6 billion yen during the same period a year earlier. It made headlines three months ago for booking a fiscal year loss of 787.3 billion yen - the biggest ever annual loss by a Japanese manufacturer.

The company yesterday blamed the dreary state of the global economy, which depressed consumption and production both at home and abroad, for its latest losses.

It recorded major revenue declines in areas such as power and industrial systems that depend on demand for automobiles. Equity losses and restructuring costs also hit its bottom line.

"The economies of industrialized nations in North America and Europe remained lackluster, with employment and wages deteriorating, despite signs in some segments that conditions had stopped worsening," Hitachi said in its report.

As expected, Hitachi announced plans to take over five publicly traded units through a tender offer as part of turnaround efforts.

The Tokyo-based company will buy the outstanding shares of Hitachi Maxwell Ltd, Hitachi Information Systems Ltd, Hitachi Systems & Services Ltd, Hitachi Software Engineering Co and Hitachi Plant Technologies Ltd.

New management at Hitachi had suggested for months that the company needed to reorganize and streamline its sprawling business.


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