Toshiba outlook cut as chips plunge

Toshiba Corp. said Monday it has slashed its projected operating profit for the full year to March by 30 billion yen to 160 billion yen, joining a growing list of technology firms that are revising their outlooks due to a slowdown in the sector.

The company blamed rapidly falling semiconductor prices for the revision, and it also cut projected revenues by 10 billion yen to 5.86 trillion yen.

"Prices are falling at such a rapid pace it's making us say, 'Just give us a break,' " Sadazumi Ryu, Toshiba's corporate executive vice president, told a news conference.

The company said prices of NAND flash memory chips have dropped by some 60 percent during the first nine months of this fiscal year.

Results for the October-December quarter, announced the same day, show that operating profit plunged 93 percent to a paltry 930 million yen on revenue of 1.37 trillion yen, up 3 percent.

On a net basis, however, Toshiba returned to the black with a quarterly profit of 1.57 billion yen, recovering from a 9.24 billion yen loss in the same period a year earlier, mostly due to tax differences and equity-method gains.

In the October-December quarter alone, falling product prices sapped some 180 billion yen in profit, the firm said.

One bright spot for Toshiba has been its personal computer business.

The PC unit is expected to show an operating profit of 6 billion yen in the current fiscal year, after posting a 47.4 billion yen operating loss the previous fiscal year.

Toshiba has been revamping its PC unit, which has been hit by fierce price competition from Dell and Hewlett-Packard.

It said its computers have been enjoying solid sales growth in the U.S. and Europe, as well as Japan.

Toshiba's downward revision was the latest in a slew of bearish outlook announcements by technology firms.

On Friday, Fujitsu Ltd. slashed its forecasted operating profit for the year by 30 billion yen to 170 billion yen, on revenue of 4.8 trillion yen, down 100 billion yen from its October forecast.

The company blamed a slowdown in sales of chips, liquid crystal displays and plasma display panels.

NEC Corp. cut its operating profit forecast by 15 billion yen to 135 billion yen for the current fiscal year, saying cost-cutting measures would not be able to offset the fall in chip sales.