Toshiba, one of Japan's largest semiconductor manufacturers and the second-largest comprehensive motor manufacturer, announced on Wednesday that its operating profit in the third quarter of the fiscal year 2022 fell by 87.5% to 5.3 billion yen, well below the consensus estimate. This has resulted in the company lowering its operating profit forecast for the full year of fiscal 2022.
Toshiba's Third Quarter Results and Forecast Cut
The semiconductor manufacturer's operating profit in the third quarter of the fiscal year 2022 was a mere 5.3 billion yen, compared to the 36.95 billion yen consensus estimate by four analysts polled by Refinitiv. The company also lowered its operating profit forecast for the full year of fiscal 2022 from 125 billion yen to 95 billion yen.
The Resignation of Chief Operating Officer
Along with the weak results, Toshiba announced the resignation of its chief operating officer, Goro Yanase. The statement on his resignation did not mention who would succeed him. However, it is believed that the reason for his resignation was due to the improper use of entertainment expenses.
Takeover Proposals from a Consortium Led by JIP
Toshiba is currently evaluating takeover proposals from a consortium led by Japanese private equity firm, Japan Industrial Partners (JIP). The consortium has invited over 10 companies, including Chubu Electric Power Co., financial services giant Orix Corp., Nippon Life Insurance Co., Toray Industries, and Tokai Central Japan Railway Co. The consortium submitted a formal takeover proposal last week.
Implications for Toshiba's Future
The weak results and the resignation of the chief operating officer may have implications for Toshiba's future. The company's financial struggles have made it a potential takeover target, with JIP and its consortium presenting one such option. It remains to be seen how the company will navigate these challenges and what its future will hold.
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