Hitachi Q1 net profit nearly doubles, but warns of slowdown

Japan tech giant Hitachi has almost doubled its net profit for its first quarter, on the back of construction machinery, power and automotive systems businesses.

For the three months ended June, the company said that net profit was 7 billion yen (US$89.2 million), up from 75 percent from a year ago, according to its statement Monday. This was despite a 1 percent drop in overall revenue to 2.12 trillion (US$27.1 billion), which the company blamed largely on the blow to hard disk drive sales due to the supply chain disruption last year.
The postive factors were increasing operating income in the automotive systems, power systems and construction machinery on the back of higher revenues.

Hitachi noted that the Japanese economy staged a recovery in the first quarter, supported by higher public works spending to help for reconstruction efforts after last year's earthquake in Japan, and by higher consumer spending spurred by government programmes.

"Exports, however, struggled due to the global economic slowdown and persistent yen strength," the company said in the statement.
"In terms of the overall business environment going forward, credit worries in Europe are expected to drag on, while at the same time there is a slowdown building in China and other emerging economies," it added.
The rising yen and stiff competition have been adding pressure on Japanese companies, setting up a cautious outlook for the next quarter for them.