Hitachi to Report Loss of $1.8 Billion for Year

Hitachi Ltd., the largest electronics maker in Japan, said it will report a group net loss of $1.8 billion for its fiscal year ending in March.

The loss will be Hitachi’s first since 1947, when the company was struggling from the destruction of World War II.

The news comes after the company said four months ago that it would post a profit.

“Our personal computer and multimedia businesses worsened much more than expected,” the company said in a statement. Shares fell as much as 7.2%.

Hitachi, which is dependent on Japan for most of its sales, has been hurt by the country’s worst recession in five decades. Sales for the year to March are likely to fall 6% from the previous year.

Hitachi will cut its work force by about 4,000 from the current 71,000, by the end of March 2000..

A decline in prices for computer memory chips also weighed on profit, the company said.

“The price of 64-megabit DRAM [dynamic random access memory] chips fell more than expected,” Hitachi said.

Prices of the chips, used to store information in computers, fell by about two-thirds in 1997.

Hitachi said earlier this week that it would combine two of its U.S. units, cutting about 650 jobs and closing a plant in Irving, Texas, because of plummeting prices for memory chips.

Hitachi also said it would cut its annual fixed costs by about 10% of current fixed costs. The company will freeze spending for capital investment.

The company said it wants to post a group net profit for the half-year period through March 1999. In addition, it hopes to bring its semiconductor business into the black by March 2000.

The company’s household electronics business will be made into a separate entity, it said.