Toshiba loss on weak TV, PC sales boosts case for revamp
By Makiko Yamazaki
TOKYO (Reuters) - Toshiba Corp (6502.T: Quote) swung to a first-quarter loss on weak PC and TV sales, raising pressure on its new chief executive to speed up a business revamp in addition to improving governance after a $1.3 billion accounting scandal.
The laptops-to-nuclear power conglomerate reported an April-June operating loss of 10.96 billion yen ($91 million) on Monday compared with a 47.7 billion profit a year earlier.
Toshiba confirmed last week it had overstated profits going back to fiscal 2008/09 by 155 billion yen. It also reported a 37.8 billion yen net loss for the last financial year through March to reflect more costs and conservative estimates on operations, including the South Texas Project, a U.S. power plant project.
An accounting probe found in July that Toshiba suffered from dysfunctions in governance, with employees discouraged from challenging unrealistically high targets set by superiors.
Previous CEO Hisao Tanaka and several other board members stepped down amid the scandal, and the company has promised to improve its governance by bringing in more outside directors.
New Chief Executive Masashi Muromachi said on Monday he was also considering an overhaul of its weaker operations. Analysts expect big cost cuts in weaker operations such as PCs and TVs.
"I'm currently considering various options for structural reforms that will be both drastic and without limitations," he told a news conference, adding that he aimed to announce some details in late October or early November.
He also said he did not plan to stay in his CEO role for too long, and that he wanted to hand over to a successor after restructuring and preparing the company for future growth. Continued...