Toshiba Cuts Operating Profit Forecasts

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Tokyo - Toshiba Wednesday cut in half its forecast for operating profit in the next fiscal year.

The company said operating profit will probably be $2.6 billion (250 billion yen) for the 12 months ending March 2011, and dropped its sales estimate by 25 percent to 7.5 trillion yen.

Company president Norio Sasaki said he expects social infrastructure, including nuclear energy systems, to be its most profitable division by early 2012.

Sasaki has said his priorities are to reorganize "problematic businesses" while returning the chip operations to profitability in the current fiscal year.

A new strategic plan announced Wednesday for the next three years, calls for Toshiba lowering capital spending in line with the Japanese economy, to $11.6 billion compared to the $16.9 billion it spent over the past three years.

The company will cut capital spending to 1.1 trillion yen for 2009 to 2011, from 1.64 trillion yen in the preceding three-year period, Toshiba said. Research and development costs will be reduced to 1 trillion yen from 1.17 trillion yen.

Meanwhile, Toshiba's small LCD unit, Toshiba mobile display, will form a joint venture with Chinese competitor, Greentech Group, and will transfer to the partner's facilities equipment from a factory it shut down last March.

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