Toshiba is likely to lose $1 billion, or 100 billion yen, in its high-definition DVD defeat. The technology company’s full-year operating profit is around $2.5 billion, or 250 billion yen, falling short of its outlook.
Toshiba’s move to pull the plug on HD DVDs will entail production line changes and other charges that would double the 50 billion yen loss the electronics group had previously expected this business year on next-generation DVDs.
“We did not announce this, and therefore we cannot comment,” a Toshiba spokeswoman said.
The industrial electronics group has said it expects an operating profit of 290 billion yen for the year through March, but executives said the uncertain outlook for the world’s No.2 maker of NAND flash memory may be hurt by price falls in microchips and liquid crystal displays.
Since Toshiba’s announcement, Japanese retailer Edion Corp has offered to swap HD DVD players purchased at its stores with rival format Blu-ray players, with consumers footing the retail price difference.
When Toshiba’s high-definition DVD formally announced its withdrawal from the business last month, it had HD DVD agreements with studios including NBC Universal’s Universal Pictures, Viacom Inc’s Paramount Pictures and DreamWorks Animation SKG Inc.