Industrywide demand for excavators was forecast to fall 21 per cent to 173,600 units for the year to March 31, below its October 28 estimate for a six per cent decline, said Hitachi Construction Machinery, the world's largest maker of giant excavators yesterday. It slashed its annual earnings forecast as a deepening global recession damped demand.
Net income for the company will probably be JPY20 billion (Dh821 million or $224m) for the year to March 31, compared with its October 28 estimate of JPY48bn, the Tokyo-based company said yesterday in a statement. That's 64 per cent lower than the year-earlier level.
Hitachi joined Tokyo-based rival Komatsu in forecasting steeper profit drops as the financial crisis spreads to emerging Asian nations, where the company expected growth to mitigate sales declines in the US, Europe and Japan. Market leader Caterpillar said this week it is cutting 20,000 jobs and profit and sales will trail analysts' estimates this year.
A loss forecast for the fourth quarter may extend into the first half of next fiscal year unless the company takes measures," Chief Financial Officer Nobuhiko Kuwahara told a media briefing.
Net income fell 76 per cent to JPY3.2bn in the three months ended December 31, and operating profit dropped 52 per cent to JPY9.6bn, according to numbers derived from the nine-month result released today. Sales slid 32 per cent to JPY146.1bn in the quarter.
Komatsu, the world's second-largest maker of earthmovers, last week forecast a 47 per cent decline in full-year net income to JPY110bn, missing its October estimate of JPY190bn, citing weakening demand from emerging markets. The company is scheduled to release quarterly results today.
Peoria, Illinois-based Caterpillar said January 26 profit excluding some items may fall this year to $2.50 a share. That was less than the average estimate of $4.22 in a Bloomberg survey of 21 analysts. Hitachi Construction rose 1.5 per cent to close at JPY939 on the Tokyo Stock Exchange, before the earnings were released. The stock fell 64 per cent in the past 12 months, compared with a 38 per cent decline in Japan's Nikkei 225 Stock Average.