Electronics cos. may see operating profit jump


Toshiba is also reportedly projecting better-than-forecast operating results for the June quarter

TOKYO, Japan (Reuters) -- Hitachi Ltd., Japan's largest electronics maker, moved into the black in the June quarter, according to a report.

Japan's six other big electronics makers will also show improved results for the period, the Nihon Keizai Shimbun said on Monday.

Hitachi was expected to post an operating profit of five billion yen ($43 million) for April-June, its first profit in five quarters and a turnaround from a prior loss projection of 10 billion yen, the paper said.

A Hitachi spokesman declined to comment on the company's earnings results, which are due for release on July 30.

Seven companies may see sharp profit

According to the Nikkei, Hitachi is among seven major Japanese electronics firms that will see a sharp improvement in operating profits for the April-June quarter.

That's thanks to a recovery in chip demand and cost-cutting efforts.

Stocks are down sharply in Asia on Monday, after WorldCom filed for bankruptycy in the United States (full story).

But the newspaper said most of Japan's electronics giants were unlikely to revise their earnings forecasts for the business year to next March.

They are concerned about the strengthening of the yen against the dollar and a stall in the rise in orders for semiconductors since the start of this month.

A first-quarter profit for Hitachi would be its first profit in five quarters and a major turnaround from an earlier projection of a 10 billion yen loss.

Recovery in memory chips

Hitachi benefited from a recovery in demand for standard memory chips and an increase in sales of high-performance materials for use in electronic devices.

It also saw a strong performance by its systems integration business, the Nikkei said.

Hitachi said in March it will combine most of its chip operations with Mitsubishi Electric Corp. (full story).

Mitsubishi Electric, Japan's fourth-largest chipmaker, and Toshiba Corp., the world's second-largest chipmaker, both also now project better-than-forecast operating results for the April-June quarter, the Nikkei said.

Sony Corp., the world's biggest consumer electronics maker, also expects to post an operating profit for the quarter after initially forecasting a loss, the business daily said.

In Sony's main electronics division, a recovery in sales of information-technology products helped offset the cost of restructuring its ailing subsidiary Aiwa Co.

Sony has also seen its results boosted by the hit movie "Spider-Man" and strong sales of its PlayStation 2 game console.

Matsushita Electric Industrial Co., the world's second-largest consumer electronics maker, expects to post an operating profit of around 10 billion yen on the back of increased sales of digital video cameras and other digital audio-visual equipment.

Fujitsu expected to trim loss

Chip and electronics conglomerate NEC Corp. expects to post a smaller than initially forecast operating loss of around five billion yen, the newspaper said.

Japan's largest computer maker, Fujitsu Ltd., expects an operating loss of around 30 billion yen, which would be about 10 billion yen less than it initially forecast, the paper said.

Both NEC and Fujitsu have seen their results improve due to greater demand for semiconductors and robust revenues from software and service operations, the newspaper said.