Electronics giant Toshiba Group, including Toshiba Corp and its consolidated subsidiaries, reported consolidated net sales that were 12% higher year-over-year for the nine months ended December 31, 2007, which it attributed to its focus on business development grounded in achieving sustained growth with profit. The company reported overall consolidated sales for the period of $48.8 billion (5.6 trillion yen).
The Tokyo-based company reported that for the period, Japan saw a transition in the economy and that from April to September 2007, the first half of Toshiba’s fiscal 2007, expansion continued, primarily in the corporate sector, on the strength of such measures as increased capital expenditures.
The trend to rising corporate profitability slowed in fiscal Q3 2007, alongside increasing uncertainty about the economic outlook triggered by such adverse factors as the subprime mortgage crisis and continued rises in crude oil prices.
Compounding matters was the pace of economic expansion in the US, which slowed in Q3, and the risk of economic downturn grew with the increasing impact of the subprime mortgage crisis, while Europe, China and other Asian countries continued to see economic expansion, Toshiba noted.
Toshiba’s consolidated operating income increased for the 9 months ended December 31, 2007 to $1.1 billion (124.6 billion yen) driven by the company’s social infrastructure group, while digital products and electronic devices saw lower operating income. Net income increased to $1.1 billion (126.2 billion yen).
By industry segment, for the 9 months ended December 31, 2007, Toshiba’s digital products segment increased sales but reported lower operating income. The PC business saw significant sales growth on increased unit sales, and the retail information systems and office equipment business also saw sales growth. Sales were also up in TVs and optical disk drives, while sales of hard disk drives decreased.
While Toshiba’s PC business recorded significant gains in operating income, the mobile phone business and hard disk drives saw lower operating income on reduced sales, and TVs saw a lower performance.
In the electronic devices segment, sales were also up on lower operating income. Toshiba said its semiconductor business saw a significant sales increase, primarily in memories, while the LCD business saw sales decline.
In terms of the decrease in the segment’s operating income, Toshiba said there was a larger than expected price decline in NAND flash memories during fiscal Q3 2007, while the LCD business also saw a lower performance.
A bright spot for Toshiba was it s social infrastructure segment which increased both sales and operating income. Sales and business performance for power, industrial and medical systems businesses were solid, the company said, while its elevator business also contributed a solid performance.
Specifically for its fiscal Q3 2007, Toshiba's consolidated sales rose 5% to $16.5 billion (1.9 trillion yen), while consolidated operating income dropped to $369 million (42.1 billion yen) due to lower operating income in the digital products and electronic devices sectors.
Fiscal Q3 2007 net income increased to $706.2 million (80.5 billion yen).
Looking ahead to the fully fiscal 2007 results, Toshiba said the economic outlook is unclear for reasons that include the subprime mortgage crisis and rising crude oil prices.
“While there has been a larger than expected decline in sales prices of NAND flash memories, the social infrastructure and the PC businesses are making solid progress. In these circumstances, Toshiba's consolidated business projections for FY2007 remain unchanged from the projections announced on October 29, 2007,” which called for consolidated net sales of $72.9 billion (7.8 trillion yen).
