Toshiba may have lost roughly $1 billion on its failed HD DVD business over the last year. That's according to an article by The Nikkei, the daily business newspaper in Japan. As a result of the report Toshiba shares have fallen 2.3%.
Although Toshiba's shares initially rose on the news it was to ditch HD DVD, its struggling next-gen disc format, it seems the stock market won't be so kind as the full financial implications are revealed. The report states that Toshiba is likely to book a $1.06 billion loss in its high-definition player business and post a full-year operating profit of around 250 million which falls short of what was ptredicted. Toshiba has predicted a $500 million loss on HD DVD for the financial year, but its decision to stop manufacture of HD DVD means production line changes that will double the cost. "We did not announce this, and therefore we cannot comment", a Toshiba spokesperson said.
Toshiba announced last month that it would exit the HD DVD business at the end of March, ceding victory to rival high-def disc format Blu-ray. The company had invested heavily in HD DVD, subsidizing the cost of low-priced players and providing marketing incentives to studios and other supporters.
The Nikkei reports that total Toshiba HD DVD losses could reach $995 million for the fiscal year ending March 31.
The newspaper did not cite a source for its estimate, according to the Associated Press, but it added that Toshiba could lose another $498 million this year in dismantling the business. AP also reports that Toshiba is now evaluating its next move after the HD DVD pull-out. "When we have determined if a revision to our earnings forecast for the fiscal year ending March is necessary we will release it as soon as possible," Toshiba said Thursday in a statement.