Toshiba Expects Return to Profitability for Fiscal Year Ending Next Month

Toshiba Corporation of Tokyo, Japan, reported results for the nine-month period ending on December 31, 2017, with net sales declining by 35.1 billion yen to 2,800.3 billion yen (U.S. $24,781.7 million), but net income increasing by 559.5 billion yen to 27.0 billion yen (U.S. $239.3 million).

It reported operating income of 49.6 billion yen (U.S. $438.7 million), a decrease of 26.5 billion yen, which it says reflects the impact of scaling back emergency measures. Income from continuing operations, before income taxes and non-controlling interests, increased by 23.6 billion yen to 87.9 billion yen (U.S. $777.7 million), mainly due to a profit of 66.8 billion yen from the Landis+Gyr Group IPO recorded in the second quarter of fiscal year 2017.

The company says it recorded lower sales due to its Energy Systems & Solutions group’s lower sales, in turn which were due to the impact of the deconsolidation of the Landis+Gyr Group through an IPO. Although its Infrastructure Systems & Solutions group saw lower sales, its Storage & Electronic Devices Solutions group recorded increased sales.

Although Toshiba’s Memory business achieved profit equivalent to an ROS of 37 percent, income from discontinued operations, before non-controlling interests, was -27.3 billion yen (-U.S. $241.6 million), reflecting the tax impact of the company split.

The company also reported higher sales and higher operating income for its Retail & Printing Solutions group, noting that the group recorded saw higher sales, as both businesses recorded a “stable performance. ” There was also an impact from exchange rate fluctuations. The segment as a whole saw “a significant increase in operating income, as both the Retail business and the Printing business saw increases in operating income.”

For it entire fiscal year that will end next month, Toshiba said it would return to profitability due to the expected completion of its multi-billion-dollar sale of its Toshiba Memory business to a consortium led by Bain Capital, as well as the successful sale of its U.S. nuclear-energy firm Westinghouse, which had suffered massive losses.

The company is forecasting a net profit of 520 billion yen (U.S. $4.9 billion) for its entire fiscal year ending in March 2018, as opposed to a net loss of 966 billion yen a year earlier.

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