HD DVD burns Toshiba's bottom line

[spicynacho]

Toshiba Likely To Post Op Profit Decline For Oct-Dec Quarter
12 December 2007 - Nikkei Report

TOKYO (Nikkei)-- Toshiba Corp is seen posting a lower October-December group operating profit than the 55.9 billion yen it booked in the year-ago period, due to plunging NAND-type flash memory chip prices and higher marketing costs for next-generation DVD recorders.

The company, however, appears to be on track to achieve its full-year operating profit target of 290 billion yen, up 12% from fiscal 2006, as first-half earnings and robust profits at other operations offset third-quarter sluggishness.

The October-December operating profit at the firm's semiconductor business is expected to surpass its year-earlier tally of 23.8 billion yen, but fall short of the 41.6 billion yen it reported in the July-September quarter. The market price for an 8-gigabit NAND-type flash memory chip is now languishing at about 4 dollars after hitting a year-to-date high of 9 dollars in August.

In addition, its operations for next-generation DVD recorders are in the red. Toshiba is spending huge sums to market its HD DVD recorders as Sony Corp. (6758) and Matsushita Electric Industrial Co. (6752) step up efforts to promote their Blu-ray machines.

Profit is also declining at its infrastructure-related business.

As a result, the company's overall operating profit for the quarter is expected to decline.

For the year ending March 2008, Toshiba's operating profit is seen reaching 120 billion yen at the infrastructure division, up 24%, and 150 billion yen at the chip business, up 17%. This is expected to make up for an anticipated loss of at least 40 billion yen at its HD DVD recorder business.

FYI 40 B yen = $360 M
This is for Oct - Dec. so starting with the firesale and ending with the calender year. That is from 330K players right before the firesale to however many SA players they sell which is at about ~500K after black friday. If they sell the same amount in december, they will have moved about 360K players in this quater. If toshiba had $100 for every HD DVD player they sold, they wouldn't be losing money. HAHAHA

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http://www.nni.nikkei.co.jp/AC/TNKS/...11D11JFA01.htm

[Batman00]

Good Stuff

[Jack]

Time to join BDA, Toshiba

[DrinkMore]

Give it up Toshiba!

[Proteus]

This is great news for Blu-ray.

With it plainly stated in a press release of that nature that HDDVD is the reason for Toshiba's loss of profit it won't take very long at all for shareholders to put an end to the dying format and insist Toshiba start making money again... By making Blu-ray players.

A very good indicator of times to come indeed. Good find.

[darkblueme]

The Paramount payoff doesn't even cover half of the loss! Classic.

[stockstar1138]

as the stockstar, even these numbers take me by suprise, i thought it would be about 2/3 to 3/4 of that type of a loss. i have no doubt their investors are going to start demanding toshiba to pull the plug. i would be so pissed if i invested in a company that told me everything was fine and that a product was going to take off big really soon and then find out that their lies have cost me big bucks. id be voting to have heads rolling.

[spicynacho]

Originally Posted by darkblueme

The Paramount payoff doesn't even cover half of the loss! Classic.

The paramount payoff should have been in last quarters books. It shouldn't cover a nickel of this loss, unless they are spreading the 150M over 18 months in which case it would cover about 30M.

[DrinkMore]

You can bet there is going to be major "restructuring" at Toshiba after this posted lost. That's how they do it over there in Tokyo

[stockstar1138]

in case you guys were curious, toshibas stock has plummeted over 20% in the past 2 months. if they continue to support hd dvd like they are, then their stock will continue to fall. if they don't support hd dvd like they are, then its game over for hd dvd really fast. it might be beneficial for both paramount and toshiba to nix that contract.

[spicynacho]

Originally Posted by stockstar1138

as the stockstar, even these numbers take me by suprise, i thought it would be about 2/3 to 3/4 of that type of a loss. i have no doubt their investors are going to start demanding toshiba to pull the plug. i would be so pissed if i invested in a company that told me everything was fine and that a product was going to take off big really soon and then find out that their lies have cost me big bucks. id be voting to have heads rolling.

This is bigger than I was expecting as well. I don't really follow the pharma or bio tech industry, but I imagine this has to be a loss of future revenue and wasted R&D expenditure on the order of magnitude as if a blockbuster drug like lipitor had failed to pass the FDA and never reached market.

[Go Blu]

Time for Toshi to take a payout from someone.

[Scorxpion]

i told you guys TOSHIBA should give up at first.Toshiba is loosing everyday.

Players has been sold without a big effect and in loss due to small margin of movies and Studios support.HD-DVD is a failure format and already died if not big money and loss throw at it to keep the format alive.UNIVERSAL and Paramount is loosing money too and their share will be decline too due to the investment in HD-DVD.

[stockstar1138]

Originally Posted by spicynacho

This is bigger than I was expecting as well. I don't really follow the pharma or bio tech industry, but I imagine this has to be a loss of future revenue and wasted R&D expenditure on the order of magnitude as if a blockbuster drug like lipitor had failed to pass the FDA and never reached market.

its kinda like that, its more like if a big pharma company put out a drug to rival lipitor and kept saying that their drug was better in everyway (when it wasn't) and kept saying that real soon this drug was going to pass lipitor in sales and they would see huge profits, and then the report comes in and their drug is way, way behind lipitor and the general concensus is that its a piece of sh1t. the stockholders would say, cut the program ASAP, its runing the price of our precious stock.

[BluOgre]

Imgaine what the losses would be if MS moneybags wasn't helping with the cost of this war. My guess is the losses would be more without MS help.

[Esox50]

A few months ago, I'm pretty sure a well placed insider posted that Toshiba head office had promised no additional funds. Now, we see a possible reason/evidence as to why.

We could be closer to the end of this thing than any of us could have believed in late August...

[sj001]

Maybe if they received a Blu suitcase with $150 million, they would drop the HD-DVD cause like a red hot coal.

[DrinkMore]

Someone take this logo and place some fire under it, around it, on it - you get the idea. I don't have PS loaded right now.

[stockstar1138]

so how exactly is toshiba going to be cutting 2 bucks off the price of an hd dvd? personally, i don't think the consumer will ever see this supposed 2 dollar drop, i think its going to be more profit for the studios, its toshibas way of trying to get them to stay, and after this report i can't see how toshiba is going to be able to justify giving even more money away.

[statikcat]

BD is not exactly a gold mine yet either? How are losses/profits for BDA at this point?