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Toshiba logs first profit in 6 quarters after major restructuring
[TOKYO] Toshiba Corp on Friday said extensive restructuring helped the Japanese conglomerate swing to its first operating profit in six quarters, signalling recovery from a US$1.3 billion accounting scandal that unmasked underperforming operations.
Toshiba, whose output is as diverse as consumer electronics and nuclear power reactors, reported profit of 20.1 billion yen (S$265.8 million) for April-June.
That compared with a year-earlier loss of 6.5 billion yen, and missed the Starmine SmartEstimate of a 33.5 billion yen profit based on five analyst estimates.
The conglomerate kept its outlook for the financial year through March at 120 billion yen in profit, a turnaround from the 708.74 billion yen loss in the previous year.
Toshiba began an investigation in April last year uncovering seven years of accounting manipulation. To remedy, it cut its workforce by 14,000 people, shrunk its semiconductor business, and sold divisions making home appliances and medical devices.
Toshiba emerged as a company focused on chips, nuclear energy and social infrastructure.
But analysts said Toshiba's recovering balance sheet has come under a new threat from US engineer Chicago Bridge & Iron Co NV (CB&I), which sold its nuclear construction business to Toshiba's US subsidiary Westinghouse Electric Co.
CB&I said last month it was suing Westinghouse to protect itself from a potential US$2 billion claim from Westinghouse for additional payments related to the October sale.
CB&I in its complaint said Westinghouse used a provision of the purchase agreement to justify its claim.
Westinghouse said it has "fully met, and will continue to fully meet, all of its obligations under the purchase agreement."
If CB&I's claim is upheld, Toshiba may need to book US$2 billion in liabilities and consider strengthening its capital base such as by issuing new shares or listing its semiconductor business, analysts said.
Toshiba shares were up 4.4 per cent in afternoon trade, while the benchmark Nikkei index was up 1.1 per cent. Earlier in the day, Toshiba said a report by the Nikkei business daily putting first-quarter profit at 20 billion yen was "close".