(Nikkei BP Group)
(No.1 High-Tech News Site in Japanese)
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| Toshiba Sees Red in '98 Half-Year, First Time in 48 Years
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November 4, 1998 (TOKYO) -- Toshiba Corp. reported a pretax loss for
the first half of fiscal 1998 fiscal that it attributed to appraisal
losses of holding securities, especially bank shares.
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The second largest all-around electronics maker in Japan sank into the
red for the first time in 48 years.
In the six-month period that ended Sept. 30, sales fell 12.3 percent
from a year earlier to 1,599,946 million yen (US$13.38 billion), and
the operating profit plunged 84.8 percent to 4,262 million yen (US$35.65
million). The pretax loss totaled 6,401 million yen (US$53.54 million).
In the corresponding period of 1997, Toshiba posted a pretax profit
of 25,401 million yen (US$212.5 million).
Toshiba blamed the loss on a 21.2-billion-yen year-on-year increase in
non-operating expenses. Other major reasons cited by the firm were the
11.6-billion-yen appraisal loss of its holding shares and foreign exchange
losses. The per-share loss was 1.99 yen. Although Toshiba paid a per-share
interim dividend of 5 yen a year earlier, the firm said it will cut
the interim dividend payments by 2 yen to 3 yen this business year.
Toshiba attributed its poor performance to three major factors: (1) a
steep decline in the price of 64Mb DRAMs and other types of semiconductor
memory chips, and sluggish sales of computer chips for consumer electric
appliances resulting from the slumping economy in Asia, (2) the slowdown
of the PC market, and the drop in the prices of PC color displays, liquid-crystal
displays and other peripherals stemming from sales of lower-priced PCs,
and (3) sagging sales of home electric appliances and heavy machinery.
By group, sales tumbled in all of its four business groups. The information
and communication systems group, which is the largest of the four, posted
640,242 million yen (US$5,355 million) in sales, down 10.9 percent from
a year earlier. Exports of telecommunications systems and sales of DVD-ROMs
were brisk, while sales of computer systems, PCs and mobile communication
equipment were sluggish, the company said.
The electronic devices and materials group posted 425,553 million yen
(US$3,560 million) in sales, down 14.1 percent, due mainly to declining
prices of memory chips, color-display tubes and liquid-crystal displays.
The power and industrial systems group registered 346,764 million yen
(US$2,900 million) in sales, down 15.3 percent. The size of the drop
was larger than those posted by other groups. Sluggish sales of nuclear
power plants, electric-power equipment and traffic-related equipment
were major reasons for the sharp drop.
The consumer products group posted 187,385 million yen (US$1,567 million),
down 6.1 percent. Sales of washing machines and air conditioners expanded,
while exports of home electric appliances slackened.
The combined exports of the four groups totaled 609,663 million yen (US$5,100
million), down 11.9 percent from a year earlier. All groups posted negative
growth in exports. By region, exports to Europe surged, while exports
to Asia plummeted and exports to North America dipped. Overseas production,
however, increased 4 percent to total 490 billion yen (US$4.1 billion).
Toshiba's investment in plants and equipment for the April-September
period totaled 95 billion yen (US$795 million), down 32.2 percent. The
firm plans to pour 140 billion yen in plants and equipment in the whole
year of 1998, 40 percent less than the investment in the previous year.
Its PC shipments totaled 1.4 million units, 300,000 units in Japan and
1.1 million units in overseas markets. Toshiba estimates the 1998 shipment
on the domestic market at 650,000 units, up 7 percent from a year earlier,
and 2.55 million units in overseas markets, an increase of 20 percent.
Toshiba also announced its outlook on its performance for the whole year
of 1998. It predicts sales will total 3,500 billion yen (US$29.27 billion),
down 5 percent from a year earlier, and the operating profit, at 40
billion yen, will be down 15 percent. The pretax profit will total 15
billion yen, down 61 percent, and the profit for the half-year term
is estimated at 12 billion yen.
More information in English is at: http://www.toshiba.co.jp/about/reports/results/98_first/noncon/e_nc1.htm
Related stories:
� NEC Posts April-Sept. Consolidated Net Loss of 19.7B Yen
� Fujitsu's FY98 Interim Ordinary Profit Plunges 88 Percent
(BizTech News Dept.)
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