Japan’s Toshiba said Wednesday that its quarterly net earnings fell 62 percent from the previous year as demand for its televisions, computers and other digital products stumbled. The technology and engineering corporation said it earned 23.01 billion yen ($233 million) between January and March 2013, the last quarter of its fiscal year, down from 61.22 billion yen in the same three months a year earlier. Sales were nearly flat at 1.75 trillion yen, it said.
The strong decline in the yen has helped many Japanese firms as they report full-year earnings, making them more competitive abroad and boosting the value of repatriated foreign income, which inflates their financial statement. Yet, the yen’s decline has had a mixed impact on Toshiba. Profit margins in its memory chip subdivision ameliorated while the yen’s devaluation clearly wounded Toshiba’s flat-panel television and computer businesses because it imports many dollar-denominated parts to make those goods, increasing production costs.
Electronics manufacturers worldwide are struggling to profit from making televisions as they face intense competition in the overcrowded, low-margin market.
However sales rose in the firm’s elevator and household apparatus divisions over the full year to March, it said. Operating profit in the latest business year was 194.32 billion yen, down 4.1 percent from the previous year and missing the company’s earlier prediction for earnings of 260 billion yen.
The firm’s stock closed down 5.00 percent at 512 yen on the Tokyo Stock Exchange Wednesday just before it made public the results, after a report in the leading Nikkei business daily pointed to the weaker-than-expected numbers.
Toshiba has faced pressure in its key infrastructure business as Japan’s nuclear power plants continued to be offline with anti-atomic sentiment running high following the Fukushima disaster two years ago. Japanese companies involved in atomic power have been increasingly looking abroad as demand has dried up at home following the worst nuclear accident in a generation.
Nevertheless, On Thursday April 18, 2013 the Nikkei newspaper made an announcement regarding the agreement that Toshiba Corp (6502 :JP) and SunEdison, a unit of U.S. based MEMC Electronic Material Inc (WFR :US), jointly made as regards of building solar power plants in Japan.
Following this announcement a spokesman for Tokyo-based Toshiba told the news that this agreement had already been decided in December 2012 but wasn’t made yet official before April 2013 for certain reasons. SunEdison will be in charge of the project while Toshiba will supervise engineering and the building of each solar plant.
This agreement to build solar plant is a result of the clean-energy incentive program that Japan launched last July due to the Fukushima nuclear plant accident in 2011. These kind of new constructions are flourishing all over the world due to the ethical, ecological and symbolic dilemma of keeping dangerous energy and being sclerotic about them. We should therefore stay informed as to how these clean-energy reforms will affect in this case Toshiba and its key infrastructure business.