Hitachi posts lower 05/06 profit, targets recovery

TOKYO, Apr 27 (Reuters) Japanese electronics maker Hitachi Ltd. on Thursday posted a 27.5 percent slide in annual profit, hit by loss-making flat TV and hard disk drive units, but forecast a stronger-than-expected recovery this year.

Flat-panel televisions, liquid crystal displays (LCDs) and hard disk drives became the three major drags on its earnings last year as steep price falls hurt their profitability.

Although some of its listed subsidiaries, including Hitachi Construction Machinery Co. Ltd., reported strong results for the past year, they failed to offset the negative effect from the three ill-performing businesses.

For the year to March 2007, Hitachi, Japan's largest electronics conglomerate, forecast a net profit of 55 billion yen (9.4 million), above the Reuters Estimates consensus forecast of 51.5 billion yen from 16 analysts.

Hitachi now aims to bring its flat TV, LCD and hard disk drive operations back into the black by the second half of the current business year, which some analysts consider a difficult task given tough competition and price declines.

It competes with larger rivals Panasonic maker Matsushita Electric Industrial Co. Ltd. and LG Electronics Inc. in plasma TVs and Seagate Technology in hard disk drives.

Hitachi, a sprawling electronics conglomerate with more than 300,000 group employees, reported a net profit of 37.32 billion yen for the year ended on March 31, down from 51.5 billion yen a year earlier.

Sales rose 4.8 percent to 9.46 trillion yen.

Shares in Hitachi, whose products range from nuclear power systems to vacuum cleaners, were up 1.53 percent at 863 yen in afternoon trade, outperforming the Tokyo stock market's electrical machinery index IELEC, which was up 0.7 percent.

Hitachi rose 25 percent in the previous business year, while the sub-index gained 39 percent.

REUTERS CS SND1202