Hitachi raised its full-year revenue forecast by 300 billion yen to 12 trillion yen after record July-September results, as orders for power grid equipment and chip inspection tools climbed and its domestic IT services business kept growing.

The Tokyo conglomerate also lifted its net income target for the fiscal year ending March 2027 to 920 billion yen from 900 billion yen, and its adjusted EBITA forecast to 1.56 trillion yen from 1.52 trillion yen, according to results released Oct. 28. For investors in Asia, the numbers are a read on two spending cycles at once: utilities upgrading transmission networks and companies building data centers for AI. It was the second straight quarter in which the company raised its outlook, MONOist reported.

Hitachi Energy Drives Orders and Profit

Second-quarter revenue rose 15% from a year earlier to 2.9044 trillion yen, a record for the period. Stripping out currency effects, growth was about 10%, the company estimated. Adjusted EBITA, Hitachi's main profit measure, rose 51.8 billion yen to 376.1 billion yen, also a record, for a margin of 12.9%.

All four business sectors grew revenue and profit from a year earlier, repeating the pattern of the April-June quarter.

Energy led. Orders in the sector rose 47% to 1.5662 trillion yen in the quarter, and the Power Grids unit alone booked 1.5074 trillion yen, up 50%. Hitachi attributed the gains to several large high-voltage direct current (HVDC) contracts in Europe and to orders tied to data centers. Energy revenue rose 28% to 960.4 billion yen, and its adjusted EBITA margin widened 2.6 percentage points to 15.2%.

The order book keeps growing faster than sales. Hitachi Energy's backlog reached 10.5 trillion yen at the end of September, up 14% from the end of March, the presentation showed. The company raised its full-year Energy EBITA forecast by 33 billion yen to 609 billion yen, citing better margins on backlog projects, productivity gains and currency effects.

The Connective Industries sector, which includes Hitachi High-Tech's measurement and analysis systems, also contributed. Orders for that unit jumped 77% in the quarter to 329.6 billion yen, which Hitachi linked to AI-related demand for semiconductor manufacturing and inspection equipment. Hitachi raised the sector's full-year revenue forecast by 2% to 3.3 trillion yen. The read-across to other Japanese chip-equipment suppliers is direct: Advantest lifted its profit forecast 14% on the same day.

Net Income Falls on Last Year's One-Off Gain

Reported net income attributable to shareholders fell 19% in the quarter to 227.1 billion yen. The comparison is distorted: the prior-year period included a gain from the sale of an air-conditioning joint venture, and Hitachi said that excluding a 91.7 billion yen effect from that deal, quarterly net income would have risen 38.3 billion yen.

Core free cash flow fell to 166.5 billion yen from a year earlier, again because of a one-time special dividend in the earlier period. For the first half, revenue rose 17% to 5.614 trillion yen and net income fell 12% to 416.6 billion yen, according to the financial statements.

Not every unit improved. In the Digital Systems & Services sector, cost overruns on certain domestic projects weighed on profit. Hitachi raised the sector's full-year revenue forecast by 2% to 3.29 trillion yen but left its adjusted EBITA target unchanged at 508 billion yen. MONOist reported the project cost increases reduced profit by 9 billion yen. The sector's margin slipped 0.4 percentage point to 15.5% in the quarter.

Lumada, Hitachi's label for its data and software-linked businesses, generated 2.428 trillion yen of first-half revenue, up 31% and equal to 44% of group sales. The full-year Lumada target rose to 5.2 trillion yen.

Higher Dividend and the Yen Assumption

Hitachi raised its interim dividend to 32 yen a share from a planned 28 yen. Share buybacks totaled 290.3 billion yen in the first half, 52% of the 550 billion yen planned for the year, and total shareholder returns are now expected to reach 814 billion yen. Net income per share is forecast at 206.41 yen, up 16% from last year.

The guidance assumes a dollar at 160 yen and a euro at 185 yen for the second half. Each one-yen weakening of the currency against the dollar from that level would add about 8 billion yen to revenue and 1.1 billion yen to adjusted EBITA, the company estimated. That makes the currency a swing factor for the second half, at a time when Japan's finance ministry has stayed out of the currency market for a second month.

Hitachi said it would keep investing in Energy capacity and AI adoption in the second half and would monitor how geopolitical risks and higher interest rates affect orders.