Toshiba takes nearly $1bn HD DVD loss

Japan's Toshiba is likely to book a $986m (£485m) loss in its high-definition DVD business and post a full-year operating profit of about $2.44bn, falling short of its outlook, the Nikkei business daily said on Thursday.

Shares of Toshiba opened down 2.3 per cent at ¥717 (£4) on the report.

Toshiba's decision to pull the plug on HD DVDs will entail production line changes and other charges that would double the ¥50bn loss the electronics group had previously expected this business year on next-generation DVDs, the Nikkei said.

"We did not announce this, and therefore we cannot comment," a Toshiba representative said.

The industrial electronics group has said it expects an operating profit of ¥290bn for the year through March, but executives said the outlook for the world's No. 2 maker of NAND flash memory may be hurt by price falls in microchips and liquid crystal displays (LCDs).

Since Toshiba's announcement, Japanese retailer Edion 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 announced its withdrawal from HD DVDs last month, it had HD DVD agreements with studios such as NBC Universal's Universal Pictures, Viacom's Paramount Pictures and DreamWorks Animation SKG.

Shares of Toshiba were trading down 1.5 per cent at ¥723 on Thursday, compared with the benchmark Nikkei average's 1 per cent fall.

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