Japanese electronics giant Hitachi Ltd announced a 79% drop in earnings on Friday January 3, 2006, as its hard disk drive business lost more money.
The company also lacked significant one-off capital gains similar to what it posted a year ago.
Losses in HDD (hard disk drives) and PC operations brought down earnings, read an Hitachi statement.
Hitachi also did not have the benefit of a more than $210m gain from the listing in the country of Elpida Memory. However, Hitachi maintained a previous profit forecast of $170m for its full fiscal year through March.
For its most recent quarter ending December, the company posted a $36.0m profit, down from $223.6m a year ago.
In 2002, Hitachi bought IBM’s hard disk drive business for $2.05bn. But competition from rivals such as Seagate Technology has been fierce and profit margins have been thing. The unit has turned a loss in recent years. During the recent quarter, the unit posted about a $62.2m operating loss.
But Hitachi said its hard disk drive business was on a road to recovery, buoyed by sales of 2.5-inch and 3.5-inch drives. The company said it now expects a smaller full-year operating loss for the unit of $227m than the $302.7m it had originally forecast.
Hitachi’s total revenues grew 6% during the quarter to about $18.9bn from a year ago.
The company posted higher revenues in its information and telecommunication systems division, as well its digital media and consumer products unit, among others.