Toshiba to Cut Operating Profit Forecast by Half, Nikkei Says

(Bloomberg) -- Toshiba Corp. is preparing to cut its full-year profit forecast by at least half, hurt in part by higher expenses in its energy business, Nikkei Asian Review reported, without saying where its information originated.

Operating profit in the year that ends in March may range from 20 billion yen to 30 billion yen ($180 million to $270 million) when the Tokyo-based company posts results Wednesday, far below the 60 billion yen it projected in November, Nikkei reported.

Increased costs in sectors like energy are dragging down earnings from core operations and the company will book additional reserves to help adjust to the situation, the report said. In November, Toshiba pulled back from nuclear projects in the U.K. and bailed from a five-year misadventure in trading of liquefied natural gas, paying a Chinese company $806 million to take its interest in a U.S. LNG export venture.

There’s also been a drag on profit from its chips systems business, Nikkei reported, while adding that there are some bright spots in point-of-sale systems, railway systems and air conditioning operation.

Toshiba will maintain its medium-term plan targeting 400 billion yen in operating profit by the year ending March 2024, aided in part by its further push into the so-called internet of things, Nikkei reported.

Toshiba spokeswoman Midori Hara said a decision hasn’t been made on a profit revision, and the company plans to release its earnings report on Feb. 13.

(Adds spokeswoman comment in final paragraph.)

--With assistance from Chuck Golding, Toru Fujioka and Yumi Ikeda.

To contact the reporter on this story: Kevin Miller in Chicago at kmiller@bloomberg.net

To contact the editors responsible for this story: Matthew G. Miller at mmiller144@bloomberg.net, James Ludden, Ken McCallum

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.