EE Times - August 6, 2007 - (Page 24) Business Hitachi’s loss narrows on sales jump www.eetimes.com By Bolaji Ojo Consumer demand faltered during the second quarter in the world’s biggest economy, but other regions of the globe picked up the slack, helping many technology companies meet their revenue and profit forecasts. Hitachi Ltd. was one of the beneficiaries of the surging demand for capital equipment and other IT products in Asia, Japan, Europe and emerging economies during the first half. The Japanese industrial and hightech company said it is similarly looking for a sales boost outside North America during its current fiscal quarter. Such gains would counter any further weakness in the U.S., where consumer spending has slowed because of a downturn in the housing market, tighter lending conditions for home refinancing and secondary mortgages, and rising interest rates. In Hitachi’s fiscal first quarter ended June 30, the net loss narrowed from the year-ago period on higher revenue attributed to strong global demand for capital equipment, though weakness persists in segments of the U.S. market. Demand weak in N. America Hitachi’s sales to Europe, Asia (excluding Japan) and other regions grew at a double-digit rate. Contributions from Japan rose 8 percent in the fiscal first quarter, but were offset by a 5 percent decline in the North American market, where demand weakened for consumer products such as flat-panel TVs, according to Hitachi. The Japanese company said it sees revenue rising 4 percent in its fiscal first half ending Sept. 30 from the year-ago period, as the economy continues to strengthen and as Japan recovers from an inventory correction. Hitachi had a net loss of $111 million for the quarter ended June 30, compared with a net loss of $179 million for the continue rising, backed by solid corporate earnings and favorable employment and wage environments, but a remaining concern is the current sub-prime loan problem,” the company said. “European economies should remain solid, chiefly due to capital investment and consumer spending,” Hitachi added. “Furthermore, Asian economies are pro“principally in automotive-related products and IT equipment and household appliance-related products, such as for LCDs,” the company said. Hitachi Chemical Co. Ltd., a supplier of materials to the semiconductor industry, and Hitachi Cable Ltd., which sells wires and cables, also reported higher sales. Results from other units weren’t as impressive, however. The information and telecommunications systems division recorded a 10 percent jump in revenue but posted a larger operating loss because of problems at Hitachi Global Storage Technologies, the company’s hard-disk drive business. The digital media and consumer products group was also hurt by weaker-than-expected sales of flat-panel TVs in North America. Revenue at the unit fell 2 percent, and its operating loss widened by 39 percent, to $183 million. Cost-cutting to continue Hitachi said it is intensifying efforts to reduce losses at several key business units, including the hard-disk drive and flat-panel TV units. The company plans to increase collaboration among its diverse business units to help reduce operating costs and leverage their purchasing capital. ■ year-ago quarter. Revenue rose 10 percent, to $20.1 billion, from $18.3 billion in the fiscal 2006 first quarter. The company’s gross profit margin also improved slightly, to 22.1 percent from 21.6 percent. While Hitachi forecasts an increase in sales for its fiscal first half, the company noted that weakness in the U.S. housing sector could affect the global economy. “Hitachi expects the U.S. economy to jected to remain strong, driven by high economic growth in China.” Hitachi’s improved fiscal first-quarter results reflect a strong contribution from the company’s power and industrial systems division, which posted a 22 percent increase in revenue, to $5.96 billion. The unit’s operating income more than doubled, to $199 million, Hitachi said. Sales in the high functional materials and components business also improved, ■ online “Cost-conscious drive makers hone focus on media” www.eetimes.com, search article ID: 201001342 Sun Micro reverses loss with $329 million profit in Q4 By Bolaji Ojo Sun Microsystems Inc. posted net income of $329 million for its fiscal fourth quarter, reversing a year-ago loss on a sharp increase in gross profit margin and reduced operating expenses. The company slashed R&D expenses during the quarter and lowered its selling, general and administrative expenses by as much as $177 million, boosting operating profit to $325 million from an operating loss of $335 million in the fiscal 2006 fourth quarter. The Santa Clara, Calif., company’s revenue was largely in line with analysts’ estimates, though profit received a boost from lower costs. Earnings for the quarter ended June 30 were 9 cents per share, compared with a net loss of $301 million, or 9 cents per share, the year before. “With a solid strategy and consistent execution, we delivered on our commitment to achieve at least 4 percent operating margin in the fourth quarter,” said Jonathan Schwartz, president and CEO of Sun Microsystems, in a statement. “This milestone marks significant progress toward our longer-term growth plan of at least 10 percent operating margin for the full fiscal year 2009.” Revenue in the recently ended quarter was $3.84 billion, largely unchanged from the year-ago quarter, when the company reported revenue of $3.83 billion. Revenue for the full fiscal year rose 6 percent, to $13.8 billion, from $13.1 billion in fiscal 2006. Sun Microsystems reported fiscal 2007 net income of $473 million, or 13 cents a share, compared with a net loss of $864 million, or 25 cents a share, in fiscal 2006. Sun executives said in a call with analysts that they are evaluating ways to further reduce the company’s costs. The company noted that it will continue to work with its channel partners to further cut inventory, which fell during the fiscal fourth quarter to $524 million from $567 million in the immediately preceding quarter and $540 million in the fiscal 2006 fourth quarter. ■ ■ online “Sun aims high with blade-based system,” www.eetimes.com, search article ID: 200000725 24 Electronic Engineering Times | August 6, 2007 http://www.eetimes.com http://www.eetimes.com http://www.eetimes.com
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