Toshiba Corp. reported a net loss of ¥140.23 billion ($1.3 billion) for the April-June quarter, weighed down by the sluggish performance of its affiliated semiconductor business amid the escalating U.S.-China trade war.
The technology conglomerate said on Wednesday that the red ink came also after booking a loss of ¥89.3 billion related to its agreement to transfer its liquefied natural gas operation in the United States to French oil giant Total S.A. as part of restructuring efforts.
In the January-March quarter of fiscal 2018, Toshiba Memory, the world’s second-largest producer of flash memory chips after Samsung Electronics Co., booked a net loss of ¥19.3 billion after sales of chips used in smartphones fell due to the trade dispute between China and the United States.
Toshiba still holds 40.2 percent of shares of Toshiba Memory Holdings Corp. after it sold the chip manufacturer to an international consortium including U.S. private equity firm Bain Capital and South Korean chip maker SK Hynix Inc. in June last year.
“With the outlook for the U.S.-China trade war and the Chinese economy remaining unclear, we may need to cut fixed costs or review our current investment plans to mitigate the negative impact down the road,” Chief Financial Officer Masayoshi Hirata told a news conference.
Toshiba’s net loss compares with its record ¥1.02 trillion net profit in the same period last year, which it booked thanks to the sale of the chip unit. It sold the unit for about ¥2 trillion to bolster its finances in the wake of its troubles.
For the first three months of the current fiscal year, Toshiba said its operating profit came to ¥7.83 billion, up from ¥730 million the year before, thanks to cost cuts and solid performance in social infrastructure business such as elevators and air conditioners.
Its sales fell 3.5 percent to ¥813.16 billion, on sluggish demand for semiconductors and after its personal computer operations were removed from its group following its sale to Sharp Corp. last year, also to streamline its businesses.
In the year through next March, Toshiba maintained its earnings outlooks, expecting group operating profit to nearly quadruple to ¥140 billion on sales of ¥3.4 trillion, down 7.9 percent.
The company did not provide a net profit forecast, citing difficulty in assessing the earnings of Toshiba Memory.