Hitachi Unexpectedly Forecasts Profit to Drop as Revenue Falls

Hitachi Ltd. unexpectedly forecast a drop in profit this year as the Japanese manufacturer projected declining revenue from its power and industrial systems businesses following a unit merger with Mitsubishi Heavy Industries Ltd.

Net income in the year ending in March may be 230 billion yen ($2.3 billion), the company said in a statement to the Tokyo Stock Exchange today. That lagged behind the 310 billion-yen average of 21 analyst estimates compiled by Bloomberg. Hitachi reported net income of 265 billion yen for the year ended in March, beating the 246.2 billion-yen average estimate.

Operating profit may increase 5.1 percent to 560 billion yen in the current fiscal year while sales may drop to 9.4 trillion yen from 9.6 trillion yen, the company said.

Hitachi fell 0.7 percent to 731 yen at the close of trading in Tokyo today, before the earnings announcement.

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