Toshiba Shares Tumble as Earnings Delayed, Chairman Steps Down, $6 Billion Writedown Expected

Toshiba Corp. (T:6502) shares are down over 8% on the day, as the company delays earnings amid a confusing morning. The company’s earning delay was followed by confirmation of a $6.3 billion hit in the company’s U.S. nuclear unit.

The hit will result in a full-year loss and eliminates all shareholder equity for the year.

Potential problems at the company’s Westinghouse nuclear business caused the company to delay their earnings, stating they were “not ready.” The company later announced a probe into the nuclear business after potential problems were uncovered.

The firm was granted a reprieve from Japanese regulators. Final audit figures are due on March 14 following the reprieve. The company cautioned investors that there is a potential of a major revision to the numbers following an audit.

Toshiba will sell a major stake in their memory chip unit and will work harder to raise capital, according to the company.

The company’s market value fell to 973 billion yen, over a 50% drop since December. Toshiba expects a $4.4 billion loss for a 9-month period ended December.

CEO Shigenori Shiga resigned from the company following the announcement.

Toshiba will not take on new nuclear plant construction projects. Shiga states that the company is searching for partners in the Westinghouse division. The sale of the company’s computer-chip business will be a big hit to the company’s bottom line. The division is highly lucrative.

The company’s nuclear loss relates to the acquisition of CB&I Stone & Webster. The company failed to assess potential liabilities and overpaid for CB&I Stone & Webster. The company’s reactor construction in South Carolina and Georgia are three years behind schedule and billions over budget.

Toshiba warns of solvency issues. The company’s revival plan has been in action for less than a year. The company will meet on Wednesday with bankers to detail the its loss. Reports earlier in the month suggest the company may withdraw from the nuclear plant construction business.

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