Toshiba slashes profit forecast

 

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By Reuters

Posted on 19 Sep 2008 at 17:40

Toshiba has slashed its full-year profit forecast, blaming a weak semiconductor market.

Toshiba, the world's second largest maker of NAND flash memory, say it expects to post a group operating loss of 30 billion yen for the April-September first half, a 100 billion yen swing from its previous forecast of a 70 billion yen profit.

Toshiba will post a 65 billion yen loss on semiconductors in the year to March - 155 billion yen below its April forecast due to price falls in NAND and weak sales of system chips.

"The outlook cut is almost entirely due to losses in the chip business, and we will concentrate our efforts in turning that around next business year," says Fumio Muraoka, Toshiba's corporate executive vice president.

It would mark Toshiba's first operating loss for the first half in five years. In April-September last year it posted an operating profit of 82.5 billion yen.

"The impact from NAND is huge because the company has poured most of its energy and capital investment into the business," says Fujio Ando, senior managing director at Chibagin Asset Management. "Aside from solar panels, flat screen TVs and Blu-ray disks, there's no area of growth among digital products."

Toshiba cut its outlook for the year to March to an operating profit of 150 billion yen from a previous forecast for a 22 percent rise to 290 billion yen.