TOSHIBA SEES Y50BN INTERIM NET LOSS, LOWERS FULL-YEAR FORECAST

Sun. September 21, 2008; Posted: 10:59 PM

TOKYO, Sep 22, 2008 (AsiaPulse via COMTEX) -- TOSBF | Quote | Chart | News | PowerRating -- Toshiba Corp. (TSE:6502) said Friday that it will likely report a group net loss of 50 billion yen (US$469.25 million) for the six months through Sept. 30, citing the worsening performance of its semiconductor business.

The firm previously estimated an interim net profit of 15 billion yen. And for the year-earlier half, it had posted a net profit of 45.6 billion yen.

Major electronics and semiconductor manufacturer Toshiba also announced plans to cut its interim dividend payout by 1 yen from a year earlier to 5 yen .

The steep downgrade in its earnings outlook stemmed from plunging prices of NAND flash memory, which in the April-June period fell 20 per cent from the previous quarter. After an additional 25 per cent drop for the July-September quarter , these chips are now languishing far below the break-even point.

NAND flash memory is used for data storage in portable music players, digital cameras, and a range of other digital consumer electronics. Considering that demand has not grown as much as expected while manufacturers have raised output, Toshiba estimates that supply now exceeds demand by around 20 per cent.

With demand for system chips also weakening, Toshiba now sees its semiconductor division logging an operating loss of 65 billion yen in the April-September half, a 130 billion yen deterioration from a year earlier.

Furthermore, weak sales of home appliances in Japan will likely result in an interim operating loss of 8 billion yen at the consumer electronics division, compared with the previous estimate of a 1 billion yen profit.

By contrast, the social infrastructure division is forecast to beat the earlier profit estimate by 10 billion yen at 30 billion yen, thanks to strong demand for power generation equipment and industrial machinery.

"Because the business environment remains tough, we cannot expect our earnings to recover quickly," Corporate Executive Vice President Fumio Muraoka said.

Toshiba downgraded its full-year projections as well. Group net profit is now forecast to drop 45 per cent to 70 billion yen, compared with the 130 billion yen estimated earlier. Operating profit has been revised down from 290 billion yen to 150 billion yen, 37 per cent less than the year before.

(Nikkei)

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