Toshiba Quarterly Profit Misses Estimates as TV, PC Sales FallNaoko Fujimura
Toshiba Corp., the Japanese maker of products from flash-memory chips to steam turbines, posted a profit that missed analysts’ estimates as sales of televisions and personal computers declined.
Net income totaled 5.3 billion yen ($54 million) in the three months ended June 30, compared with a loss of 12.1 billion yen a year earlier, the Tokyo-based company said in a statement today. That lagged behind the 14.5 billion-yen average of six analyst estimates compiled by Bloomberg.
The digital products division widened its loss almost fivefold, reflecting falling sales of liquid-crystal-display televisions and weaker demand for PCs as consumers shifted to smartphones and tablet computers, Toshiba said. Hisao Tanaka, who became president in June, is reorganizing the unprofitable TV and PC operations to focus on semiconductors and energy.
“For TVs, the market in Europe has worsened, even as the domestic market is starting to improve,” Makoto Kubo, Toshiba’s corporate senior executive vice president, said at a briefing in Tokyo. “The PC market in Europe and North America also slumped.”
Toshiba declined 3.8 percent to 425 yen in Tokyo trading before the results. The stock has risen 26 percent this year, compared with a 31 percent gain for Japan’s benchmark Nikkei 225 Stock Average.
The digital products unit posted a loss of 16.3 billion yen in the quarter, widening from 3.3 billion yen a year earlier.
The company kept its forecasts for the year ending March 31. Toshiba projects net income will rise 29 percent to 100 billion yen, and sales will gain 5.2 percent to 6.1 trillion yen, it said in May. Operating profit, or sales minus the cost of goods sold and selling, general and administrative expenses, may climb 34 percent to 260 billion yen, the company said.
Kubo said the weaker yen also hurt Toshiba’s PC business in Japan, as that increases the costs of importing components. The yen fell 13 percent against the U.S. dollar in the first six months of the year, the most among 10 major currencies tracked by Bloomberg.
The television business lost about 100 billion yen in the past two fiscal years, hurt by competition from other makers including Samsung Electronics Co.
As part of efforts to turn the division profitable in the second half of this financial year, Toshiba plans to reduce fixed costs and boost the proportion of sales from emerging markets to 40 percent this year, from 30 percent, as demand declines in Japan and Europe, it said July 26. The company also said it plans to transfer 400 people out from the digital products division to another unit.