 Hitachi makes hard disks for the iPod mini |
Japan's biggest electronics maker, Hitachi, said profits rose to 26.6bn yen ($256m) in its third quarter, compared with 2.5bn yen a year ago. But most of the rise can be attributed to the November listing of chipmaker Elpida Memory, in which Hitachi has a 25% stake.
Sales for the quarter ended 31 December rose 3.8% to 2.12 trillion yen.
Falling product prices have dented optimism and it halved its full-year forecast to 31 March to 50bn yen.
Plummeting prices
The company said it was hurt by falling prices in nearly every business area - servers and personal computers, liquid-crystal displays and consumer electronics like plasma TVs.
 |  Hitachi's earnings and downward revision have been widely expected so there's no need to dump more stocks  |
The company said the prices of liquid-crystal displays and PCs have both fallen about 40% over the past year, about twice as much as it expected.
It halved its profit forecast for the year to 50bn yen from 100bn yen and said sales would fall to 8.84 trillion yen from 8.9 trillion yen.
Down but not out
"Hitachi's earnings and downward revision have been widely expected so there's no need to dump more stocks," a chief fund manager at a major Japanese asset management company told Reuters.
"The interesting thing is that technology firms' share prices have not continued falling even after the companies report poor results or outlooks.
"That's because these kinds of earnings have been pretty much factored in and investors are betting on a recovery in their earnings from sometime around April," he said.
Shares in Hitachi closed 1.7% lower at 679 yen on news of the lowered forecast on Wednesday.
Flat-screen venture
Separately, Hitachi said it would increase its stake in a plasma display panel joint venture with Fujitsu of Japan to 80.1%.
However, it declined to say how much it would pay for the extra share in the venture, which had been equally owned.
The venture, Fujitsu Hitachi Plasma Display, is the world's fourth-largest plasma panel maker and has been hit hard by falling flat panel prices amid fierce competition.
The deal is to be completed in April.
Hitachi has more than 300,000 employees and makes everything from nuclear reactors to the one-inch hard disk drives used in Apple's iPod mini.
However, the new lower-cost iPod Shuffle uses flash memory rather than small Hitachi hard disks, which could raise growth concerns for this part of the Japanese company's business.
One-Minute World News 
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