Toshiba expects to record its first loss in seven years this year as a result of the global economic problems and the strong yen, it said Thursday.
The company had been expecting a modest profit, but lowered its outlook for its fiscal year ending March 31 as it announced results for the last three months of 2008.
During the period the company recorded a net loss of ¥121 billion (US$1.3 billion) on 21 percent lower sales of ¥1.5 trillion. In the same period of 2007 Toshiba made a profit of ¥80 billion.
It blamed the bad global economy and strengthening Japanese yen for the poor results.
Sales of digital products fell 27 percent and those of electronic devices and components dropped 31 percent. Both business units lost money during the quarter, with losses in the device segment by far the worse of the two. Plunging sales of memory chips and steep declines in chip prices pushed the division to a loss of ¥134 billion -- more than five times the loss recorded by the digital products group.
In reaction, Toshiba is delaying construction of a new memory chip plant in Yokkaichi in central Japan until 2010, and postponing construction of a second plant until market conditions show signs of improvement. The change in plans, along with other cutbacks, will see capital expenditure in 2009 of less than ¥100 billion, which is about 60 percent lower than that of the current financial year.
Toshiba also plans to cut research and development spending by 20 percent to ¥320 billion in the coming year, it said.
It will also pursue job cuts and encourage work-sharing schemes. Initially the cuts will hit around 4,500 part-time workers in its semiconductor and LCD (liquid crystal display) businesses.
For the full year Toshiba said it expects losses to climb to ¥280 billion and for sales to be ¥6.7 trillion. It had been predicting a profit of ¥70 billion on sales of ¥7.7 trillion.