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October 31, 2009

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No light at end of tunnel for Toshiba

TOSHIBA Corp eked out a small net profit in the July-September quarter on cost-cutting and higher sales of memory chips but is still forecasting a US$550-million loss for the full year.

The Japanese conglomerate, which makes everything from nuclear power plants to household electronics, yesterday reported a net profit of 100 million yen (US$1.1 million) for the fiscal second quarter. It had a loss of 26.9 billion yen in the same period a year earlier.

Quarterly sales fell 13.9 percent to 1.616 trillion yen from 1.877 trillion yen.

Toshiba attributed the improvement in earnings to cost-cutting and an end to declines in memory chip prices. While sales of TVs and personal computers fell sales of memory chips, including NAND flash memory used to store data on portable music players and mobile phones, rose during the quarter.

The company, which reported a record annual loss of 343.6 billion yen last fiscal year, said it was seeing signs of an upturn in Asia, particularly China, but the overall economic outlook was "severe" with high unemployment in many countries.

It said the Japanese economy was showing improvement, including in exports and consumer spending, but capital spending was still conservative and a tough job market made for an unclear outlook.

Toshiba forecast a net loss of 50 billion yen for the full fiscal year through March.

Its best-performing business was social infrastructure, which includes nuclear and thermal power plants, as well as elevators and escalators. Quarterly sales slipped 3 percent from a year earlier.

Sales of digital products fell 20 percent from a year earlier, while home appliance sales sank 23 percent.


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