Hitachi could pull out of HD business if they continue to lose money. A good sign for STX. Either they continue to lose money and pull out, or they start to make money, in which case I am pretty sure that Seagate would make even more money.
Hitachi targets margin rise, may exit flat TVs
TOKYO, Nov 16 (Reuters) - Japan's Hitachi Ltd. (6501.T: Quote, NEWS, Research) said it aimed to double its operating profit margin in four years and could pull out of flat TVs and hard disk drives if they continued to lose money.
Japan's biggest electronics conglomerate announced on Thursday its new mid-term goals, saying it would make profitable its power systems, flat TVs and hard disk drives next year and increase profitability through March 2009.
Hitachi will consider pulling out of the three businesses, as well as partnerships and acquisitions to turn them around, if they fail to meet their targets, Hitachi President Kazuo Furukawa told reporters.
But Hitachi dislikes abandoning businesses and has a track record of not meeting its mid-term plans, JP Morgan's analyst Naoki Sato said. "I would be very surprised if they actually withdraw."
Hitachi, whose products range from washing machines to nuclear power plant equipment, said it would strengthen its hard disk drive business by increasing production capacity in China and Thailand and by increasing its line-up of new products using vertical magnetic recording techniques, which increase storage.
The world's No. 5 plasma TV maker also said it would raise its share through bigger displays and would increase its line-up of liquid crystal display TVs through an existing venture with Matsushita Electric Industrial Co. Ltd. (6752.T: Quote, NEWS, Research) and Toshiba Corp. (6502.T: Quote, NEWS, Research).
"We are focusing on profitability now," Furukawa said.
Hitachi said it would raise its profit margin to 5 percent, almost double the 2.7 percent it posted last year and would trim its sprawling operations by cutting subsidiaries to 700 from 885 at the end of September.
more at today.reuters.com |
