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canceled dividend & revised forecast:
Closing US plants, firing workers:
Hitachi Announces Fiscal 1998 Business Forecast Revision and Interim Dividend
TOKYO--(BUSINESS WIRE)--September 2, 1998--Hitachi, Ltd.
(NYSE:HIT) today announced that it has revised its business forecast
for fiscal 1998, ending March 31, 1999, and has decided not to pay the
interim dividend.
1. Business forecast for fiscal 1998
1) Unconsolidated forecast Millions of yen
Fiscal 1998 Fiscal 1997
Revised forecast (A)/(B) Previous Midterm(2) results
(A) x100 forecast(1) (B)
Net sales 3,750,000 92% 4,000,000 1,820,000 4,078,030
Ordinary
income(Loss) (100,000) - 30,000 (70,000) 17,220
Net income
(Loss) (260,000) - 20,000 (110,000) 10,236
1. Announced in May 1998.
2. Forecast for first half of
fiscal 1998.
- Factors relating to the revision of the forecast -
The market price of 64-megabit DRAMs fell below the predicted level
and system LSIs suffered a severe setback owing to slow market
development. Previously active electronic devices experienced a
decline in demand and falling prices, while business results in
the personal computer and multimedia sectors also deteriorated.
The outlook for net sales and ordinary income has therefore
become considerably poorer than previous forecast.
In addition, Hitachi, Ltd. took an extraordinary loss for
restructuring semiconductor operations at both domestic and
overseas bases, amortized the prior service cost portion of
employees pension fund plans and wrote down investment in certain
investment securities owing to sharp decreases in the share
prices of mainly financial institutions.
2) Consolidated forecast Millions of yen
Fiscal 1998 Fiscal 1997
Revised forecast (A)/(B) Previous Midterm(2) results
(A) x100 forecast(1) (B)
Net sales 7,940,000 94% 8,400,000 3,890,000 8,416,834
Income before
income taxes
(Loss) (230,000) - 170,000 (125,000) 171,726
Net income
(Loss) (250,000) - 40,000 (130,000) 3,477
*T
Notes:
1. Announced in May 1998.
2. Forecast for first half of
fiscal 1998.
2. Fiscal 1998 interim dividend
In view of the decline in business results, the interim dividend is
not to be paid. The annual dividend for fiscal 1997 was 11 yen
per share, of which 5.5 yen per share was paid as an interim
dividend.
Note: The forecasts for the first half of fiscal 1998 and for the
year ending March 31, 1999 are forward-looking information which
reflects management's current views with respect to certain
future events and financial performance. Actual results may
differ materially from this forecast. Further, this
forward-looking information is based upon assumptions of future
events which may not prove to be accurate. Factors that could
cause actual results to differ materially from the forecast
include, but are not limited to, rapid technological change,
particularly in the Information Systems & Electronics segment;
Hitachi, Mitsubishi to Close Plants in U.S., Fire Workers
San Jose, California, Sept. 1 (Bloomberg) -- Two of Japan's biggest semiconductor makers, Hitachi Ltd. and Mitsubishi Electric Corp., said they will close plants and fire workers in the U.S. because of weak prices for computer-memory chips.
Hitachi, Japan's largest electronics maker, said it will combine two of its U.S. units, cutting about 650 jobs and closing a memory-chip plant in Texas. Mitsubishi plans to close a memory- chip assembly plant in Durham, North Carolina, cutting 230 jobs.
Prices of dynamic random-access memory chips, the most common memory chips in personal computers, have fallen 70 percent in the past 12 months, leaving manufacturers with large losses. Many have cut production and canceled plans for new plants.
''People are losing their shirts in memory chips,'' said Dan Hutcheson, an analyst at VLSI Research in San Jose.
Hitachi is the sixth-largest chip company in the world. Mitsubishi is No. 10. Both are based in Tokyo.
Hitachi said its new, merged subsidiary will focus on designing microprocessors that power hand-held computers, electronic games and other devices. Those chips command higher prices than DRAMs, which now sell for about $2 apiece.
Texas Plant
Hitachi's Texas plant has about 500 workers, all of whom will be fired. Another 150 positions will be cut in California, where the two units that are being combined are based.
Hitachi Semiconductor (America) Inc., which manufactures and sells computer chips, will be combined with Hitachi Micro Systems Inc., a chip-design and engineering unit, to form Hitachi Semiconductor (America) Inc., based in San Jose, California. The combination will be completed by Oct. 1, Hitachi said.
The new unit will have 370 employees. Its chief executive will be Peter Clark, who was vice president at Hitachi Micro Systems. Hitachi Ltd., the parent company, has 16,000 employees working in 70 subsidiaries around the U.S.
Hitachi has been losing money in its semiconductor and household-electronics businesses. The company plans to reorganize into about 10 divisions to try to cut costs. It has 900 subsidiaries now, making mainframe computers, elevators, televisions and heavy equipment for power plants. It lost $238 million in the six months ended March 31.
Mitsubishi
Mitsubishi, meantime, said it will close the Durham plant Nov. 6 as part of a plan to centralize memory-chip assembly and test operations in Nagano, Japan. It is looking for an outside vendor to assemble memory modules, the collections of memory chips used in computers. That work had been done at the Durham plant. Mitsubishi closed a DRAM manufacturing plant in Durham earlier this year because of falling prices.
The industry ''has been in an oversupply situation since 1996, which has forced (memory-chip) prices down to ridiculous levels,'' said Michael Bocian, a general manager for memory products at Mitsubishi Electronics America Inc.
Hitachi's American depositary receipts, each representing 10 common shares, rose 2 7/8 to 52 1/4 today.
Mitsubishi's American depositary receipts, which also represent 10 common shares, fell 3/8 to 18 1/8.
17:55:12 09/01/1998
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