Hitachi posts ¥227.1 billion net income, shares fall 10.5% despite raised outlook
Key Facts
Hitachi reported on October 28 results for the second quarter ended September 30, 2026, posting net income attributable to shareholders of ¥227.1 billion. The figure fell ¥53.4 billion year over year, but the comparison included a ¥91.7 billion gain from the sale of an air-conditioning joint venture in the previous year. Excluding the effect of that gain, net income rose ¥38.3 billion year over year, the company said. Revenue, meanwhile, increased 15% to a record ¥2,904.4 billion, or 10% excluding the foreign-exchange effect. Adjusted earnings before interest, taxes, depreciation and amortization also rose to ¥376.1 billion, up ¥51.8 billion, while the margin increased 10 basis points to 12.9%.
Hitachi said all four of its segments — Energy, Digital Systems and Services, Connective Industries and Mobility — recorded year-over-year growth in revenue and profit, and that second-quarter revenue and adjusted profit reached records. Energy posted the strongest growth among the segments with detailed figures: revenue was ¥960.4 billion, up 28%, and its adjusted profit margin rose to 15.2%, an increase of 260 basis points. The company linked first-half order growth to major high-voltage direct-current power transmission projects in Europe, data center orders and continued demand for power transmission equipment. In Digital Systems and Services, revenue rose 10% to ¥814.1 billion, but the margin fell 40 basis points to 15.5%. Hitachi cited a negative impact of ¥9 billion from one-time factors in the first half, including higher costs on some domestic projects during the quarter.
In Mobility, revenue rose 16% to ¥348.5 billion, and the margin improved 100 basis points to 7.3%. Segment orders increased 69% to ¥404.1 billion, supported by major railway and control system projects in Europe, the company said. Connective Industries recorded revenue of ¥825.5 billion, up 9%, while its margin fell 60 basis points to 11.5%. Hitachi attributed order growth in the segment to semiconductor manufacturing, measurement and inspection equipment, driven by AI-related demand. The results show mixed performance across the segments, with revenue expanding in each while margins declined in Digital Systems and Services and Connective Industries.
At the cash flow level, core free cash flow was ¥166.5 billion in the second quarter, down ¥33.6 billion from a year earlier. The comparison, however, included a previous special dividend of ¥63.2 billion; excluding its effect, cash flow rose ¥29.6 billion year over year. The company raised its fiscal 2026 forecast, increasing its revenue estimate by ¥300 billion to ¥12 trillion. It also raised its adjusted profit forecast by ¥40 billion to ¥1.56 trillion, and net income attributable to shareholders by ¥20 billion to ¥920 billion. It attributed the expected revenue increase mainly to Digital Systems and Services and Connective Industries, while it expected most of the increase in adjusted profit to come from Energy and Connective Industries.
Hitachi raised its expected interim dividend to ¥32 per share from ¥28, and said its share buyback program had reached 52% of its annual target by the end of the first half. In the second half, the company plans to continue capital spending, particularly in Energy, alongside company-wide growth investments to accelerate AI adoption. It added that it is monitoring the effects of geopolitical risks and higher interest rates on orders and customer demand. Hitachi shares fell 10.5% to ¥5,030 in Thursday's session on October 29, according to an Investing.com report. The Nikkei 225 rose 1.2% in the same session; the report did not identify a specific cause for the share decline.