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Toshiba slumps a second day as analysts suspend ratings on probe
[TOKYO] Toshiba Corp fell in Tokyo for a second day as the number of analysts suspending coverage reached six in the aftermath of an investigation into improper accounting on projects.
The stock dropped 3.2 per cent to 391 yen as of 10 am in Tokyo, extending the decline in the past two days to 19 per cent. Goldman Sachs Group Inc became the sixth bank to suspend ratings since Toshiba announced the investigation on May 8, according to data compiled by Bloomberg.
Toshiba is probing accounting methods used in units that encompass nuclear, hydroelectric and wind power equipment, air- traffic control and railway systems. The company, which also makes memory chips and personal computers, said it may have to restate earnings as far back as 2013.
"This raises questions about the reliability of the financial figures on which our earnings estimates are based," Takeo Miyamoto, an analyst at Mitsubishi UFJ Morgan Stanley, said in a May 11 report, suspending a neutral rating. "We intend to reassign a rating on the stock when conditions allow us to reformulate an investment opinion."
Toshiba had previously projected net income of 120 billion yen ($1 billion) on sales of 6.7 trillion yen in the year ended March.
Several construction projects have understated costs, Aya Oshima, a spokeswoman for Toshiba, said May 8. The magnitude of the earnings restatement and responsibility for the misstatements aren't yet clear, Ms Oshima said.