The hard disk drive manufacturing division of Japanese electronics giant,
Hitachi, has reported an
operating loss of more than [$177m] in its most recent quarter, according to
analysts. Losses are expected to continue this year, even as Hitachi examines
cost cutting options.
The shortfall at Hitachi Global Storage Technologies (Hitachi GST) was $26m
worse than the unit's loss in the first three months of 2007, but was still
broadly line with earlier estimates from the company and analysts.
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Market watchers believe that the pain is by no means over for
Hitachi GST, the former
IBM hard disk drive division that Hitachi purchased from the US computer firm in
2003.
“Hitachi [GST] has been mulling additional measures to consolidate bases and
concentrate development resources with the aim of turning a profit in [the
fourth quarter of 2007],” wrote Yamasaki in a recent investment report. “While
this target seems feasible in our opinion, we think Hitachi needs to take
additional measures to ensure stable profitability.”
Despite the losses at the storage division and weaker than expected shipments
at the display panel division, Hitachi reported overall operating profits of
[Yen 24.5bn]. However, a weaker yen contributed half of this, analysts say.
“In the HDD, flat-panel TV and other businesses where there are currently
issues with profitability, Hitachi is implementing wide-ranging countermeasures
to improve its development capabilities, cost competitiveness, and marketing
activities and other areas of its operations,” Hitachi announced in a statement.
The company should act quickly to address challenges in displays and storage,
says Yamasaki: “We think an urgent response is needed because prices fall and
technology changes quickly for these products.”
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