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Toshiba's HD DVD losses lower than predicted

Toshiba Corp cut its full-year profit forecast by 31% because of the costs to withdraw from the HD DVD business and falling prices for flash memory. The company said it will book a ¥45 billion ($452m) charge to write down the value of its HD DVD assets, forcing Toshiba to face its first annual profit drop in six years.

The operating loss at the HD DVD division will rise to ¥65 billion ($654m) this fiscal year, compared with the ¥50bn ($502m) deficit forecast earlier, Toshiba said. This is substantially lower than initial forecasts of $1bn. Sales at the business will probably climb 86% to ¥26 billion, missing the previous goal of ¥65 billion.

Toshiba also cut its operating profit projection for its semiconductor business by 43% to ¥85 billion, citing greater-than-expected price declines. The division posted operating income of ¥128.3 billion last fiscal year.

Flash-memory price declines will probably reach 50%this fiscal year, exceeding Toshiba's 40% projection in October outlook, and continue at about that rate, Corporate Executive Vice President Fumio Muraoka said at a press briefing in Tokyo.

Story filed 20.03.08

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