Presentations & Events


- ended March 2006 (For 167th Fiscal Period)

Presentation for FY2005 Q1 Results

For 1st Quarter ended June, 2005   - July 28, 2005

Outline of the presentation

1. Consolidated Business Results for First Quarter of FY2005

Net Sales 1,298.8 billion yen (+4% YoY)
Operating income -1.9 billion yen (-16.0 billion yen YoY)
Income (loss) before taxes, minority interest -3.6 billion yen (-3.9 billion yen YoY)
Net income -8.9 billion yen (-1.1 billion yen YoY)

For the fiscal year ending March 31, 2006, equity in earnings of affiliates has been included in income (loss) before income taxes and minority interest.

  • Toshiba's overall consolidated sales were 1,298.8 billion yen (US$11,701 million), an increase of 50.9 billion yen from the same period of the previous year. Digital Products, Social Infrastructure and Home Appliances recorded higher sales than in the year-earlier period, while Electronic Devices saw a sales decrease.
  • Consolidated operating income (loss) was minus 1.9 billion yen (minus US$16.7 million), a decrease of 16.0 billion yen from the same period a year ago. Digital Products and Social Infrastructure saw improvement in operating income (loss) compared to the same period a year ago, while Electronic Devices saw lower operating income than in the year-earlier period, the result of price erosion.
  • Income before income taxes and minority interest was minus 3.6 billion yen (minus US$32.4 million), down 3.9 billion yen from the year-earlier period. The net loss widened by 1.1 billion yen from the same period a year ago to minus 8.9 billion yen (minus US$80.4 million).

2. Revised Business Forecast for the First Half of FY2005

Net Sales 2,880.0 billion yen (+4% YoY)
Operating income 20.0 billion yen (-30.7 billion yen YoY)
Income before taxes, minority interest 10.0 billion yen (-11.6 billion yen YoY)
Net income 0 billion yen (-8.4 billion yen YoY)

Q & A Session

Q1. In terms of the profit of the first half forecast of FY05, which businesses are doing better than the original forecast of April 28th and which are doing worse?
Both Electronics Devices and Social Infrastructure are expected to surpass the original forecast by 5 billion yen.
Q2. Please tell us about the profitability of the PC business.
The 1st quarter result was slightly better than the original forecast in terms of profit. The PC business may face some risk in profit in the 2nd Quarter, due to yen depreciation against the US dollar, because of higher dollar-denominated imports. However we aim to achieve our original profit target by offsetting any negative impact through further cost reductions and by increasing sales volume.
Q3. Please tell us about the situation in the TV business.
The 1st quarter profitability of our TV business was slightly improved against the year earlier period, but still in the red, mainly due to severe price erosion.
Q4. At the beginning of FY05, Toshiba said it would reduce the TV business deficit by 10 billion yen. Can you achieve the target with this result for the 1st quarter?
The TV business is suffering severer price erosion than we anticipated at that time. We cannot commit to the concrete level of improvement at this moment.
Q5. Please let us know the performance of your HDD and ODD businesses.
HDD achieved a positive figure, better than a year earlier. ODD was in the red, but the level of the deficit is shrinking.
Q6. Please comment on the Discrete, System LSI and Memory businesses.
Discrete business achieved a positive figure in the 1st quarter but not the original plan. System LIS was still in the red in the 1st quarter, on the high R&D burden for the Cell chip. However in the latter half of FY05, broadband system LSI will ramp up and other products will increase the volume. So we believe the R&D cost will be absorbed and the business will return to profit. Memory over-achieved the forecast profit level in the 1st quarter.
Q7. Please tell us the capacity utilization ratio for the semiconductor operations.
Himeji Operations: full operation for power devices and other discretes, around 80% for assembly process of small signal devices Kitakyushu Operations: around 95% for bipolar ICs, full operation for opt devices Oita Operations (System LSI):
-150mm lines producing analogue devices and MOS devices: less than 100%
-200mm lines using advanced process technology: full operation
Yokkaichi Operations (memories): full operation
Q8. Please tell us the pricing condition for NAND flash memory.
Pricing stabilized in January through April this year, on market expansion of card-type and high density NAND. We saw spot price erosion in the May and June time frame, but from July on we expect the market to undergo seasonal expansion, with moderate price declines within our expectations.
Q9. Regarding NAND flash memory, please tell us the current fulfillment ratio to orders and also production capacity.
The current fulfillment ratio to orders is around 80%. NAND flash demand is expanding, mainly by demand for memory cards and MP3 players.
The production capacity, based on current plan, is as follow:
Jun.05   45 million units a month (512 Mbit)
Sep.05   65 million units a month (ditto)
Dec.05   75 million units a month (ditto)
Q10. Please let us know the production capacity of 300mm line in Oita operations (System LSI).
Wafer input will be 7,000 wafers a month in both first half and second half of FY05.
Q11. Please tell us the LCD business situation.
Toshiba focuses on the medium- to small- sized TFT market for the application in mobile phones, AV and PC. In the 1st quarter, the mobile phone and AV business was almost in line with our expectations. However the PC business saw reduced revenue and profit due to increasingly severe competition.
Q12. It looks as if the medical business is going well. How well was compared with the year earlier?
The profit increased by 1 to 1.5 billion yen in the 1st quarter.
Q13. What was the P&L impact by the transfer of TMT&D?
The impact was not so material.
Q14. Consolidated income before income taxes and minority interest is 10 billion yen for the first half of FY05. On the other hand, non-consolidated recurring income is 17 billion yen for the same period. What is the difference?
Non-consolidated recurring income includes dividend income from Toshiba's subsidiaries but consolidated income doesn't because of the group accounts elimination. That is the main difference.

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