Lower margins at Toshiba

PC sales are up, but profit stays flat

Japanese electronics giant Toshiba reported flat sales in its electronics businesses, despite overall sales up 12 per cent to Y5568.4bn (£26.3bn) for the nine months to the end of 2007.

Overall income was also up Y14.9bn (£70m) to Y126.2bn (£595m) over the period.

But despite success in business units such as "social infrastructure" – which includes power systems and lift sales - the electronics divisions did less well.

Despite revenue growth of six per cent to Y789bn (£3.7bn) in the digital products arm, and rising PC sales, income still dropped by 11 per cent to Y6.3bn (£30m) due to lower margins on mobile phone and hard disc sales.

The electronic devices arm also saw slow progress with revenue flat at Y440.6bn (£2.1bn) and profit down 7.6 per cent to Y14.9bn (£70m). Though the semiconductor business made some gains, income dropped due to declining prices of Nand flash memory.

"The economic outlook in the fourth quarter of full year 2007 is unclear for reasons that include the sub-prime mortgage crisis and rising crude oil prices, " says the firm's financial statement.

"While there has been a larger than expected decline in sales prices of Nand flash memories, the social infrastructure and PC business are making solid progress.

"In these circumstances Toshiba's consolidated business projections for 2007 remain unchanged."