Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: BillyG who wrote (28298)	1/20/1998 5:11:00 PM
From: DiViT	Read Replies (2) \| Respond to of 50808

Eighty five percent?... Toshiba Says U.S. PC Sales Rivalry Cuts Into Profit By Yuko Inoue TOKYO (Reuters) - Japanese electronics giant Toshiba said cut-throat price competition in the U.S. personal computer market will cause an earnings nose-dive in the current business year. Toshiba said its group net profit would plunge 85 percent from its prior forecast issued on November to 10 billion yen ($76.9 million) in the year to March 31. In 1996/97, its net profit based on U.S. accounting rules totaled 67.08 billion yen. "Slow business in our personal computer operations in the United States as well as Japan was the biggest reason for the downward revision (in our earnings)," Kiyoaki Shimagami, a Toshiba managing director, told a news conference. Toshiba has been hit hard by doldrums in both desk-top PCs and its forte notebook PC businesses particularly in the United States, where American and Asian makers are scrambling to offer lower-priced, lower-end models. "A move to $1,000 PCs and the introduction of various notebook PC models with a sharp price edge have driven out Toshiba products," said Kazushi Shiga, a Dataquest analyst. "This is an indication that even the notebook PC market no longer yields generous profits," he added. A Toshiba spokesman said the drastic change in the U.S. market trend was beyond its expectations. "Toshiba is in a now-or-never moment in the U.S. notebook business, and we are now carefully studying a market strategy for the spring, including that for low-end product lines," he said. Toshiba cut its forecast for global sales of personal computers in 1997/98 to 700 billion yen from the earlier forecast of 740 billion yen. Analysts say Toshiba had enjoyed generous profits from corporate-use notebook product lines, which sell for about $3, 000 to $4,000. Newcomer makers on the other hand now sell notebooks for less than $2,000. UBS Securities analyst Yoshiharu Izumi now expects Toshiba's PC operations to post a group operating loss of about 10 billion yen in the year to March 31, compared with an estimated operating profit of 90 billion yen a year earlier. Shimagami said Toshiba has been struggling to reduce its swollen PC inventories amid slow sales in November and December, and is considering slimming down its U.S. sales operations. Toshiba also suffers from lower demand for home electronics and falling prices in memory chips and other computer devices. Shimagami said its home electronic appliance business would post an operating loss of around 30 billion yen in the current business year, wider than the November forecast of 17 billion yen. The expected wider loss prompted analysts to call for drastic restructuring measures.