Why Toshiba Expects a Larger Loss This Year

February 4, 2016, 4:19 PM UTC
This picture shows a logo mark of Toshiba at an exhibition in Tokyo on January 30, 2014. Japan's Toshiba said on January 30 its net profit dropped 29.1 percent in the April-December term because of higher taxes, although healthy sales saw its operating profit rise. AFP PHOTO / KAZUHIRO NOGI (Photo credit should read KAZUHIRO NOGI/AFP/Getty Images)
Photograph by Kazuhiro Nogi — AFP/Getty Images

Japanese industrial conglomerate Toshiba Corp expects a bigger full-year loss than previously anticipated, amid mounting restructuring costs after a $1.3 billion accounting scandal.

Toshiba said on Thursday it now expected a net loss of 710 billion yen ($6 billion) compared with a previously expected loss of 550 billion yen.

Chief Executive Masashi Muromachi told a press conference that Toshiba had lowered its expectations to fully reflect possible downside risks to its business.

Muromachi also pledged to accelerate restructuring efforts, announcing an additional 240 job cuts or replacements on top of some 10,000 already announced.

He also reiterated plans to sell Toshiba’s loss-making laptops and home appliances businesses.

Muromachi said he could not rule out a possible deal with Sharp Corp for the home appliances unit even after it chose Taiwan’s Foxconn, known formally as Hon Hai Precision Industry Co, as its preferred bidder in takeover talks.

He also said a foreign manufacturer could be the buyer.

Toshiba is trying to recover from a book-keeping scandal in which it overstated profits from around 2009. In December, it said it would slash 6,800 consumer electronics jobs, taking total cuts beyond 10,000, including previously announced plans.

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