Toshiba first-quarter loss on weak TV, PC sales boosts case for revamp

Toshiba first-quarter loss on weak TV, PC sales boosts case for revamp

By Ritsuko Ando

TOKYO (Reuters) – Toshiba Corp <6502.T> swung to a first-quarter loss on weak PC & TV sales, raising pressure on its new chief executive to speed up a business revamp in addition to improving governance after a $1.3 billion accounting scandal.

The laptops-to-nuclear power Japanese conglomerate reported on Monday an April-June operating loss of 10.96 billion yen ($91 million) compared with a 47.7 billion yen profit a year earlier.

Toshiba confirmed last week it had overstated profits going back to fiscal 2008/09 by 155 billion yen. It moreover reported a 37.8 billion yen net loss for the last financial year through March to reflect more costs & conservative estimates on operations, including the South Texas Project, a U.S. power plant project.

An accounting probe found in July that Toshiba suffered from dysfunctions in governance, with employees discouraged from challenging unrealistically-high targets set by superiors.

Previous CEO Hisao Tanaka & several other board members stepped down amid the scandal, & the company has vowed to improve its governance by bringing in more outside directors.

New Chief Executive Masashi Muromachi said last week he would moreover overhaul weaker operations & reconsider his predecessor's M&A plans. Analysts have said the company could announce huge cost cuts in weaker operations such as PCs & TVs.

The quarterly results showed revenue fell 5 percent from a year earlier to 1.35 trillion yen. Net PC sales fell 31 percent to 116.8 billion yen while TV sales roughly halved to 21.8 billion yen, it said.

Toshiba's nuclear business moreover struggled, & its energy & infrastructure unit recorded an operating loss of 10.7 billion yen compared with a profit of 10 billion a year earlier.

With Monday's announcement, Toshiba has finally caught up with its regular financial disclosures. It had twice postponed its full-year results due to the accounting investigation, raising fears the company could be delisted from the Tokyo bourse.

The bourse said on Monday it placed Toshiba shares on a watch list & fined the company 91.2 million yen for betraying investors' trust. Financial regulators are widely expected to impose a separate & more serious fine.

Toshiba shares fell 2 percent on Monday in Tokyo, ahead of the announcement of the quarterly results. They have tumbled around 38 percent since the company first disclosed the accounting problems in early April.

(Reporting by Ritsuko Ando; Editing by Muralikumar Anantharaman)

Source: “Reuters”