Toshiba Corp has seen a drastic decline in profits from PC sales and consumer electronics goods, resulting in a punishing 77% drop in pre-tax profits. The Japanese computing and consumer electronics giant has posted first half net profits that fell 43% to the equivalent of $75m on revenue that grew a modest 4% to $20.35bn. Part of the blame was laid at the door of the new Japanese consumption tax (levied at 5% from April this year) together with a mild summer in Japan affecting sales of air conditioners. But the company has also seen fierce competition in its computing business with the advent of cheap $1,000 PCs which have forced down profit margins. The company claimed that its semiconductor business was profitable in the half, and it expects profits from this division for the full year. The decline in the price of memory chips was offset by increased sales of logic devices. Sales of portable personal computers continued to post record gains in Japan and Europe, according to the company but some analysts are predicting that Toshiba will find this an increasingly tough business to make money in as more and more competitors arrive in the market. For the full year, Toshiba is predicting revenues of $43.03bn, up 0.9% from last year, and pre-tax profits of $743m, down 24%.
