Higher costs hit Hitachi profits

Hitachi makes the trains that will be used for the Channel Tunnel rail link

Hitachi has reported a quarterly loss, blaming sluggish demand, the strong yen and increases in raw material costs.

The Japanese company saw a loss of 17.3bn yen (£109.3m; $177m) in the three months to the end of September, compared to a net profit of 558m yen.

The electronics firm also cut its full financial year profit forecast by 63%, from 40bn yen to 15bn yen.

Meanwhile other Japanese electronics companies NEC and Nintendo saw improved profits despite the global slowdown.

Hitachi spokesman Atsushi Konno said: "We slashed our projections as we expect that our business environment, including the foreign exchange and stock markets, will continue to be difficult."

Sales of flat screen TVs were particularly disappointing due to falling prices.

Contrasting fortunes

Hitachi's fortunes contrast strongly with those of Nintendo, which has announced it is on course for record profits in the current financial year.

The game and console maker is forecasting a profit of 345bn yen, a 34% rise on the profit it made last year.

Strong sales of the Wii console are offsetting the strong yen, particularly after the launch of the hugely successful Wii Fit game.

"As far as the overseas market is concerned, I have not seen any signs of of slowing demand for the Wii," said Nintendo President Sartoru Iwata.

Overseas sales account for 88.5% of the company's total revenue.

Meanwhile NEC reported a profit of 1.3bn yen for the quarter, compared with a loss of 5.8bn yen for the same period last year.