Hitachi Construction Machinery Co. Ltd said that it has revised its earnings outlook for the fiscal year of March 2016. The company specializes in the manufacture of shovels, hydraulic excavators, and trucks for construction and mining sectors.
The company cut its 2016 net income forecast to 9.5 billion yen from the previous forecast of 13 billion yen. On per share basis, the construction equipment maker now anticipates basic net income to be 44.68 yen, compared to the previous estimate of 61.15 yen.
The company reduced its income before income taxes forecast to 19.5 billion yen from the previous estimate of 21 billion yen. Hitachi blamed foreign exchange losses for its revised forecasts.
Hitachi Construction revised its full-year revenue outlook to 760 billion yen from the prior forecast of 780 billion yen. This fall in revenue outlook is due to the decline of revenue in mining and construction machinery.
The Japanese construction equipment maker reported third quarter net income of 810 million yen, down from 24.13 billion yen in the previous year quarter. Quarterly operating profit dropped to 12.3 billion yen from 44.5 billion yen in the same period last year.
Revenue for the third quarter amounted to 549.1 billion yen, down 95% from 579.77 billion yen in the prior year period.
In addition, HCM is determined to succeed HCM's wheel loader production and development business to KCM Corp via a corporate separation. The company noted that this corporate separation would come to effect on April 1, 2016. This move is intended to combine the technologies of HCM and KCM to achieve higher production efficiency and thereby improving clients' satisfaction.
Major contractors and miners have wrapped their investments expressively and things remain rough for the company due to this impact, Bloomberg said quoting Tetsuo Katsurayama, Chief Financial Officer of Hitachi. The company's Chinese sales contracted to 8.9% as a percentage of revenue in 2015 from 26% five years before.
Hitachi's rival Komatsu's sales continue to wear away as poor worldwide mining and construction markets jerk demand for fresh equipment, according to Seeking Alpha.
Zacks Investment Research upgraded Komatsu's shares to buy rating from hold rating in a research report on Thursday, MarketBeat said. Shares of Komatsu was up 0.82 percent in the Thursday mid-day trading. The firm has a market capitalization of 13.86 billion US dollar. According to reports, Komatsu Australia will team with Triple Eight Race Engineering for the 9th successive year in 2016.
Hitachi Construction Machinery reduced its forecast for the year 2016 as the demand for mining and construction equipment weakens. The slowdown in global economy, on the whole, contributes to the poor demand in the industry.
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