Some of Japan's biggest high-tech makers revealed fresh losses or plunging profits Thursday, underscoring the continued difficult conditions facing companies in the world's number two economy.
Japanese electronics makers have been aggressively cutting costs and jobs to ride out the global economic downturn, but a strong yen and feeble worldwide demand for their products continues to weigh on earnings. Worldwide government stimulus measures have provided some support for consumer spending but there are concerns about what will happen as the effects of the pump-priming measures wear off.
Hitachi, which makes everything from refrigerators to nuclear power systems, posted a net loss of 133.2 billion yen (US$1.5 billion) for the six months to September. "Overall capital investment and final consumption are not picking up. Conditions remain severe," vice president Takashi Miyoshi said.
Hitachi is slashing up to 7,000 jobs after losing 787.3 billion yen in the year to March 2009 -- the biggest ever loss for a Japanese manufacturer. It kept its outlook for a net loss of 230 billion yen in the year to March 2010.
Even Nintendo, once thought to be relatively resilient to the global recession, was unable to buck the broad industry decline, with net profit falling more than half to 69.49 billion yen in the first half to September. The Kyoto-based firm also slashed its full-year forecasts as sales of the Wii game console took a dive from an absence of hit new games, projecting a net profit of 230 billion yen, from an earlier projection of 300 billion yen. Nintendo recently cut the price of the Wii by a fifth in an effort to reinvigorate sales -- a move that also hit its profits.
It was the first time that Nintendo has reduced the price of the family-friendly console since it was launched in 2006 with a motion-sensing controller that can simulate a gun, sword, golf club or orchestra baton.
NEC, another big electronics maker that is cutting 20,000 jobs worldwide, said it had lost 43.6 billion yen in the first half, while Sharp Corp. fell 17.7 billion yen into the red.
Sharp expects to return to the black in the full year to March 2010 with a net profit of 3.0 billion yen, but it cautioned that conditions remain difficult. The maker of Aquos liquid crystal display televisions warned that business could worsen early next year when stimulus measures wear off. "While business conditions in the October-December quarter may continue to improve, the market will become pretty severe in the January-March period," said Sharp vice president Toshishige Hamano.
The bleak earnings news came despite some brighter news on the economy, with Japan's factory output rising 1.4% in August, for a seventh straight monthly gain -- the longest unbroken expansion in 12 years.
Compared with a year earlier, however, output was down 18.9%, reflecting a plunge in production at Japan's plants and factories since the global economic downturn began.
Copyright Agence France-Presse 2009