Toshiba dives on shock loss delaying earnings report

The sell-off extended morning losses that were sparked by a report in Japan's Nikkei business daily, which said Toshiba was going to issue a warning to shareholders that its future is in jeopardy.

By: AFP | Tokyo | Published: February 14, 2017 2:10 pm
Toshiba, Sony, Toshiba sensor deal, Toshiba-Sony deal, Toshiba business sell-off, Toshiba Image Sensor, technology, technology news (Source: Toshiba)

Toshiba shares dived on Tuesday  after it delayed the release of financial results expected to include billions of dollars in losses tied to its ailing US nuclear power unit. The stock price plunged 9.45 per cent to 226.2 yen at one point after it surprised markets by saying its nine-month earnings report had “not yet become available”.

The shares closed down 8.0 per cent at 229.8 yen.

“We have submitted a request to extend the deadline” by one month for the earnings which were due on Tuesday, Toshiba said in a statement, citing ongoing reviews by its lawyers and an independent auditing firm.

Watch What Else Is Making News 

The longer-than-expected review period is required to investigate information from a whistleblower which is linked to its US nuclear business, it said. It was unclear if company executives would still hold a previously scheduled news briefing later in the day, according to a company spokeswoman.

The sell-off extended morning losses that were sparked by a report in Japan’s Nikkei business daily, which said Toshiba was going to issue a warning to shareholders that its future is in jeopardy.

Shares in the firm have almost halved since late December, when Toshiba first flagged huge losses in its atomic unit. Earlier reports said Toshiba — one of Japan’s best-known firms and a cornerstone of its post-war industrial rise — was likely to log a net loss of more than $4.0 billion in the April-December period.

The shortfall is linked to losses reportedly topping $6.0 billion at the troubled US nuclear business, once touted as filling a hole left after the 2011 Fukushima crisis slammed the brakes on new atomic projects in Japan. The reported loss is related to problems with the value placed on a deal involving the purchase of a nuclear services company by Toshiba subsidiary Westinghouse Electric.

The Nikkei report said Toshiba’s mounting losses would force the company to warn investors over its ability to continue as a going concern in its current form. It would be the first such warning by the group since its birth from a 1939 merger, according to the Nikkei.

Some other reports have said Toshiba chairman Shigenori Shiga and Danny Roderick — an executive and the former head of Westinghouse Electric — are expected to step down. There is speculation Toshiba will dramatically reduce its nuclear operations and stop building new atomic power plants, but would continue designing and making reactors and other components.

For all the latest Business News, download Indian Express App

    Live Cricket Scores & Results