The Japanese hi-tech company's group net profit came to 2.5 billion yen (23.7 million dollars) for the period, reversing a net loss of 2.2 billion yen a year earlier.

The profit gain was mainly due to "improved earnings in electronics devices and digital media and consumer products segments," Hitachi Ltd. said in a statement.

Many Japanese electronics companies such as Matsushita, Sony, Sanyo, Sharp, enjoyed brisk sales of flat-screen televisions as the December 1 launch of terrestrial digital broadcasting encouraged consumers to replace their old sets.

Sharp and Sanyo have already reported markedly increased third quarter net profits, thanks largely to demand for consumer digital electronics.

"Thanks to buoyant demand for IT and digital home appliance products, LCD (liquid crystal display) and PDP (plasma display panels) we did very well," Yoshiki Yagi, executive vice president, told a news conference.

Hitachi said its profit gain was also helped by reduced mandatory corporate contributions to the government's national pension plans.

Pre-tax profit surged to 46.1 billion yen from 603 million yen on sales of 2.05 trillion yen, up seven percent from the same period last year. Sales in Asia remained strong.

Hitachi pointed to a major improvement in its hard disc drive business, included in the information technology system division, helped by the addition of operations acquired from US computer giant IBM.

"We had originally forecast an annual operating loss of some 40 billion yen for the HDD business," Yagi said. "But thanks to the restructuring efforts, the annual loss is now expected to come in at around 10.9 billion yen," Yagi said.

Hitachi maintained its forecast for the year to March, projecting 10 billion yen in net profit, 225 billion in pre-tax profit and 170 billion yen in operating profit on revenue of 8.35 trillion yen.

Yagi said the full year profit forecast was not raised because Hitachi's better-than-expected digital business performance was offset by weakness in its power/industrial division in the third quarter.

The company said Japan's economic outlook remained uncertain despite expectations the global economic recovery would gather pace, led by the United States and Asia.

"There are still no immediate expectations for a dramatic improvement in the job market and the recent significant changes in foreign exchange rates continue to impact corporate earnings," Hitachi said.

Japanese exporters have voiced concerns that a sharply higher yen against the dollar would hurt their profits and Japan's export-led economic recovery.

"As the sharp fluctuation (of the yen's exchange rate) could have a major impact, we will be watching developments in the foreign exchange market closely," Yagi said.

Hitachi also cited the outbreak of bird flu in Asia as a concern.

"We will also stay alert to developments of bird flu... as SARS (Severe Acute Respiratory Disease) completely paralyzed our China business," last year, he added.

SPACE.WIRE