Japanese technology giants Toshiba Corp and Fujitsu Ltd both recorded losses for the year through March 31 as a result of poor semiconductor sales and a slumping domestic economy. Toshiba reported a group net loss of 13.9bn yen ($115m), compared with a 7.34bn yen ($61m) profit the previous year. Falling memory chip prices and soft sales of logic chips were largely to blame, the company said. Overall revenue dipped 2.9% to 5.3 trillion yen ($43.81bn), the second consecutive decline, while operating profit plunged 63% to 30.48bn yen ($252m). For Toshiba, the poor year marked its first group net loss in 23 years.
Operating profit from information and telecommunications systems more than doubled to 94.7bn yen ($783m), boosted by strong sales in the company’s PC business, but that wasn’t enough to save the year. Pretax profit dropped 40% to 11.22bn yen ($93m) and the bottom line was also hit by 16.8bn yen ($139m) in one-time tax payments under US accounting standards. In the current year through March 2000, Toshiba says it expects a net profit of 25bn yen ($207m) on renewed strength in chip sales and home electronics. Revenue is projected to rise 8% to 5.7 trillion yen ($47.11bn), while group operating profit will soar to 110bn yen ($909m).
Fujitsu, meanwhile, reported a group net loss of 13.64bn yen ($112m) after posting a net profit 5.59bn yen ($46m) the prior year. Like Toshiba, the company cited a decline in chip prices – as well as cutbacks in domestic telecommunications investment and hefty restructuring charges – as the prime reasons behind the loss. Group pretax profit totaled 76.74bn yen ($634m), down 37% from last year, and sales rose 5.2% to 5.24 trillion yen ($43.3bn).
The bottom line was hit by extraordinary losses from the closing of the company’s semiconductor manufacturing plant in the UK and other restructuring expenses, as well as a one-time charge of 38.1bn yen ($314m) related to realignment at its British ICL Plc unit. For the current year, Fujitsu projects group sales up 8% at 5.65 trillion yen ($46.7bn), a pretax profit of 170bn yen ($1.4bn) and net profit of 80bn yen ($661m). The company will also cut its semiconductor investment by 19% this year, even as it increases production 10%. Last year, it cut spending on chip production by roughly 54% cut.
