Toshiba cuts sales targets on continued weakness

Underlying global economic weakness will likely hit full-year forecasts

Toshiba cut its full-year sales predictions on Friday as a result of continued weakness in the global economy.

The Tokyo-based maker of products as diverse as computer chips, televisions and nuclear power stations said it now expects net sales in the year to March 31 to be ¥6.4 trillion (US$71 billion), down 6 percent from its previous forecast of ¥6.8 trillion. Toshiba reported sales of ¥6.7 billion for the previous financial year so the revision means it now expects overall business to decline rather than expand this year.

It kept other key forecasts unchanged and still expects to lose ¥50 billion in the current financial year.

"Toshiba's overall consolidated sales have been strongly influenced by the global recession, which has proved to be more persistent than expected in all segments," it said in a statement.

Sales forecasts were reduced in each of the company's five main business areas and as a result the digital products division is now expected to be the largest of Toshiba's business areas by sales during the year.

The unit, which includes Toshiba's TV and laptop computer operations, had its sales forecast cut by 3 percent to ¥2.4 trillion yen. The operating profit forecast for the unit was cut to ¥5 billion from ¥20 billion but that still represents a reversal of losses seen last year.

Toshiba's social infrastructure division, which includes its nuclear business, is expected to see sales of ¥2.3 trillion, which is down 9 percent from the prior prediction. It also means the will see sales drop and not climb as previously forecast. The operating profit prediction was also trimmed to ¥140 billion but that's still up on last year.

The third-largest business, the electronic devices and chips unit, is predicted to see sales of ¥1.3 trillion, down 4 percent from its previous goal and a slight drop on last year's sales. But it's not all bad news as Toshiba halved loss forecasts for the unit to ¥30 billion. Last year the business lost more than ten times as much money.

Toshiba said the chip sector was benefiting from improved demand for NAND flash memory, which is the type of memory chip used in digital cameras, cell phones and removable memory cards.

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