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Toshiba Cuts Operating Profit Forecasts

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.