Tech giant Toshiba is feeling the blues after posting a net profit of 73.7 bn yen on the back of sluggish sales in TV and PCs.
Toshiba sales fell to 6,100.3 billion yen (US$74,393.4m), for the full year to March 31 FY2011 – a drop of 298.2 bn yen compared to FY 2010.
Net profit of 73.7 bn yen ($898.8m) showed a disappointing drop of 46.5% or 64.1 bn yen – blamed on increasing tax expenses due to a revision of Japan’s Corporation Tax Act .
Overall sales were down in its AV, TV and PC segments, reflecting the “impacts of sharp yen appreciation, the Great East Japan Earthquake, the floods in Thailand and market downturns,” Toshiba said in a statement.
However, its ‘Social Infrastructure’ division, which includes power and Industrial Systems enjoyed higher sales than last year.
Even though its “Visual Products”, which includes TVs, saw sales increase in emerging economies, Toshiba slumped in its native Japan due to the transition to digital TV and the ending of a stimulus program there.
Tosh’s digital products and PC sales were also sluggish due to slow sales in the United States and Europe and currency translation adjustments due to sharp yen appreciation.
However, the Japanese giant did see some cost improvement due to reorganization and consolidation of domestic and overseas facilities, after its decision last year to consolidate several of its production plants.
Tosh’s PC business recorded higher operating income on the “execution of proactive cost reductions and lower parts and material costs.”
Toshiba’s ‘Storage Products’ business also witnessed a jump due to the “healthy performance” of hard disk drives (HDD), but the semiconductor business fell due to the floods in Thailand, price declines in memories and a fall-off in demand for discretes and system LSIs.
“The Japanese economy remained in a severe condition due to the impacts of the GreatEast Earthquake, exposure to sovereign risk in some European countries and the impact of sharp yen appreciation,” Toshiba warned.
“In these conditions, Toshiba Group, aiming to become an even stronger, a world-leadingdiversified company by overcoming demanding business conditions, strongly promoted global business deployment and the transformation of itsbusiness structure through strategic investments and acquisitions.”
The company is forcasting rising sales across all divisions for 2012, totalling 6.4 trillion yen and a net profit of 135 billion yen for FY2012.
It said it will focus on the storage, smart Community and Healthcare businesses.