Hitachi Quarterly Profit Soars 31 Percent on Cost Cutting

Japan's Hitachi said Wednesday its net profit surged 31.3 percent in the April-June quarter, aided by a sharp drop in the yen, cost cuts and strong results in its auto and railway divisions.

The vast conglomerate booked net income of JPY 54.9 billion (roughly Rs. 2,843 crores) for the first quarter of the fiscal year, up from JPY 41.8 billion (roughly Rs. 2,160 crores) a year earlier.

Sales climbed 6.9 percent to JPY 2.3 trillion (roughly Rs.1,18,861 crores) for the three months, said the company which sells everything from batteries to nuclear plants.

A sharp drop in the yen boosted major Japanese exporters including Hitachi, making them more competitive overseas and inflating their bottom line.

The company also pointed to a solid performance in its auto and electronic-related products as well as its lifts and railway system divisions.

In February Hitachi said it would buy the rail and traffic signal businesses of Italy's Finmeccanica, in a deal that could reach more than $2.0 billion (roughly Rs. 12,777 crores) as it looks to take on global rail giants.

The acquisition was expected to push up Hitachi's annual rail-related sales to more than 400 billion yen about half that of Canada's Bombardier, Siemens of Germany or France's Alstom.

For the year to March next year, Hitachi kept its full-year forecast unchanged, estimating that its net profit would be JPY 310 billion (roughly Rs. 16,017 crores) on sales of JPY 9.9 trillion (roughly Rs. 5,11,512 crores).