Tokyo, October 28, 2010 --- Hitachi, Ltd. (NYSE:HIT / TSE:6501) today announced revisions to the Company’s consolidated interim and full-year business forecasts for fiscal 2010, year ending March 31, 2011, which were announced on July 30, in light of recent business performance.
Reasons for Revisions
Hitachi has raised its overall consolidated revenue forecasts for the first half of fiscal 2010, the six-month period from April 1 to September 30, 2010, from the previous forecast issued on July 30, 2010, when it announced its first-quarter results. This revision is based on improved revenues in 9 of the 11 business segments, most notably in Information & Telecommunication Systems, Social Infrastructure & Industrial Systems, Electronic Systems & Equipment, and Automotive Systems segments.
Operating income is also expected to be higher than the previous forecast in all business segments due to increased revenues and progress cost cutting, including fixed expenses. Furthermore, as a result of an improvement in net other deductions as well, income before income taxes, net income, and net income attributable to Hitachi, Ltd. are all expected to be higher than the previous forecasts.
Hitachi has also raised its previous forecast for consolidated revenues for fiscal 2010, due mainly to better-than-expected performance in the Social Infrastructure & Industrial Systems, and Automotive Systems segments. Hitachi is now also forecasting higher operating income than the previous forecast due to improved earnings in most business segments, particularly Social Infrastructure & Industrial Systems, Electronic Systems & Equipment, Construction Machinery, High Functional Materials & Components, and Financial Services segments, despite the expected impact of the yen’s appreciation and uncertainty surrounding the global economic outlook.
Certain statements found in this document may constitute “forward-looking statements” as defined in the U.S. Private Securities Litigation Reform Act of 1995. Such “forward-looking statements” reflect management’s current views with respect to certain future events and financial performance and include any statement that does not directly relate to any historical or current fact. Words such as “anticipate,” “believe,” “expect,” “estimate,” “forecast,” “intend,” “plan,” “project” and similar expressions which indicate future events and trends may identify “forward-looking statements.” Such statements are based on currently available information and are subject to various risks and uncertainties that could cause actual results to differ materially from those projected or implied in the “forward-looking statements” and from historical trends. Certain “forward-looking statements” are based upon current assumptions of future events which may not prove to be accurate. Undue reliance should not be placed on “forward-looking statements,” as such statements speak only as of the date of this document.
Factors that could cause actual results to differ materially from those projected or implied in any “forward-looking statement” and from historical trends include, but are not limited to:
economic conditions, including consumer spending and plant and equipment investments in Hitachi’s major markets, particularly Japan, Asia, the United States and Europe, as well as levels of demand in the major industrial sectors which Hitachi serves, including, without limitation, the information, electronics, automotive, construction and financial sectors;
exchange rate fluctuations for the yen and other currencies in which Hitachi makes significant sales or in which Hitachi’s assets and liabilities are denominated, particularly against the U.S. dollar and the euro;
uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-term financing;
uncertainty as to general market price levels for equity securities in Japan, declines in which may require Hitachi to write down equity securities that it holds;
the potential for significant losses on Hitachi’s investments in equity method affiliates;
increased commoditization of information technology products and digital media-related products and intensifying price competition for such products, particularly in the Components & Devices and the Digital Media & Consumer Products segments;
uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate new technology on a timely and cost-effective basis and to achieve market acceptance for such products;
rapid technological innovation;
the possibility of cost fluctuations during the lifetime of or cancellation of long-term contracts, for which Hitachi uses the percentage-of-completion method to recognize revenue from sales;
fluctuations in the price of raw materials including, without limitation, petroleum and other materials, such as copper, steel, aluminum and synthetic resins and shortages of materials, parts and components;
fluctuations in product demand and industry capacity;
uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact of fluctuations in product demand, exchange rates and/or price of raw materials and shortages of materials, parts and components;
uncertainty as to Hitachi’s ability to achieve the anticipated benefits of its strategy to strengthen its Social Innovation Business;
uncertainty as to the success of restructuring efforts to improve management efficiency by divesting or otherwise exiting underperforming businesses and to strengthen competitiveness and other cost reduction measures;
general socio-economic and political conditions and the regulatory and trade environment of Hitachi’s major markets, particularly Japan, Asia, the United States and Europe, including, without limitation, direct or indirect restrictions by other nations on imports, or differences in commercial and business customs including, without limitation, contract terms and conditions and labor relations;
uncertainty as to the success of alliances upon which Hitachi depends, some of which Hitachi may not control, with other corporations in the design and development of certain key products;
uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property rights, particularly those related to electronics and data processing technologies;
uncertainty as to the outcome of litigation, regulatory investigations and other legal proceedings of which the Company, its subsidiaries or its equity method affiliates have become or may become parties;
the possibility of incurring expenses resulting from any defects in products or services of Hitachi;
the possibility of disruption of Hitachi’s operations in Japan by earthquakes or other natural disasters;
uncertainty as to Hitachi’s ability to maintain the integrity of its information systems, as well as Hitachi’s ability to protect its confidential information and that of its customers;
uncertainty as to the accuracy of key assumptions Hitachi uses to valuate its significant employee benefit related costs; and
uncertainty as to Hitachi’s ability to attract and retain skilled personnel.
The factors listed above are not all-inclusive and are in addition to other factors contained in Hitachi’s periodic filings with the U.S. Securities and Exchange Commission and in other materials published by Hitachi.