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Japan's tech giants post solid results
Wednesday, July 31 2002
by Ciaran Buckley


After suffering through the high-tech slump and a recession, many of Japan's top
electronics firms are once again profitable, giving hope to the sector there. 





On Tuesday, Mitsubishi, Matsushita, Sanyo and Sharp all reported profitable
quarters and Toshiba and Hitachi announced reduced losses. 





Toshiba, Japan's largest chipmaker, said that it halved its group net loss,
thanks to restructuring and a recovery in its electronic-devices operations. 
And its recovery continues, Toshiba said, but at a sluggish pace because of
reduced capital investment in Japan and the US. In the first quarter ended 30
June, Toshiba's net loss was YEN18.80 billion, compared with a YEN33 billion loss
for the same quarter last year. Sales rose by 2 percent to YEN1.2 trillion.





Meanwhile, Hitachi narrowed its group net loss by 76 percent to YEN8.01 billion
from a YEN33.96 billion loss a year earlier. Group sales eased 4 percent to
YEN1.865 trillion. Hitachi said the improvement was because of cost cuts made
through large-scale restructuring and improved demand for information equipment
and electronic devices. The company held on to its current full-year outlook of a
group net profit of YEN60 billion and revenue of YEN8.1 trillion,



Hitachi's electronic-devices category performed especially well, regaining
profitability, and posted an operating profit of YEN2.36 billion from a
year-earlier YEN18.79 billion loss. Unloading and shutting down unprofitable
operations, as well as a recovery in liquid-crystal display (LCD) prices, helped
the firm's earning. The firm also credited the improved figures to signs of
recovery in the US and Asian economies, but cautioned that "uncertainty in the
global economic environment increased as the US stock market softened."





Mitsubishi, Japan's fourth largest chipmaker, reported a group net profit of
YEN857 million (EUR7.4 million) in the last quarter, compared with a year earlier
loss of YEN11.10 billion, despite the fact that revenue fell 15 percent to YEN727
billion. The improvement has been attributed to cost cutting, restructuring and
an improved performance of its industrial machinery and equipment business. 





The firm also held steady in its full-year outlook for a group net profit of
YEN25 billion on revenue of YEN3.7 trillion. Like Hitachi however, the company
warned of potential derailments ahead. "Things seem less certain with the
dollar falling and US share prices falling," said Yukihiro Sato, corporate vice
president at Mitsubishi Electric Corp,





Matsushita, which controls the Panasonic brand and is the world's second biggest
consumer electronics maker, returned to profitability as consumers bought more
Panasonic-brand DVD recorders, wall-mounted televisions and appliances, the
company said. Matsushita reported a group net income of YEN4.3 billion, in the
three months ended 30 June, compared with a loss of YEN19.4 billion, in the same
period last year. Sales rose 5 percent to YEN1.76 trillion.





Sanyo posted net income of YEN3.59 billion for the quarter ending 30 June,
compared with YEN3.98 billion a year ago. Sales rose 1.1 percent to YEN507.6
billion from YEN502.1 billion a year ago. The company's first quarter pre-tax
profit increased 26 percent to YEN8.64 billion from YEN6.87 billion yen in the
same quarter last year.





Finally, Sharp, the biggest liquid crystal display maker in Japan, posted a first
quarter operating profit of YEN25.8 billion in the three months ended 30 June.
Sales rose 10 percent to YEN477.3 billion. Prices of large liquid-crystal
displays (LCDs) have risen because demand has risen from the makers of desktop
and notebook personal computers.  Sharp has benefited from higher prices since
late 2001 after they almost halved last year, the firm said.