Toshiba sees profit doubling, beats consensus

Toshiba sees profit doubling, beats consensus

Tokyo: Toshiba Corp, the world’s No.3 chipmaker, forecast its profit to more than double this year, beating expectations, boosted by brisk chip demand and cost cuts.

The global chip sector is expecting strong demand this year as consumer appetite for new gadgets such as smartphones and tablet-style devices helps accelerate the tech sector’s recovery.

But some analysts have warned rapid spending plans at leading semiconductor makers could lead to another supply glut.

Toshiba, second-ranked in NAND-type flash memory after Samsung Electronics, is trying to cut costs and focus on promising business areas including nuclear power and lithium-ion battery to counter the impact of volatile chip prices.

NAND chips are used in consumer products such as Apple Inc’s iPhone and iPad. Toshiba is the world’s third-biggest chipmaker after Intel and Samsung.

Toshiba expects an operating profit of ¥250 billion ($2.75 billion) for the year to March 2011. That was above an average forecast for a ¥242.2 billion profit in a poll of 19 analysts by Thomson Reuters.

It forecast annual sales would rise 9.7% to ¥7 trillion and net earnings to return to the black at ¥70 billion.

It booked a quarterly operating profit of ¥104.3 billion for January-March and an annual profit of ¥117.2 billion. That compares with a quarterly loss of ¥74 billion and an annual loss of ¥250.2 billion a year earlier.

The results for last financial year came as no surprise as Toshiba issued revised estimates in April for the year just ended.

Toshiba has also been stepping up efforts to restructure its sprawling operations and shed money-losing businesses, and it recently announced the sale of an LCD panel plant in Singapore to Taiwan’s AU Optronics Corp.

Toshiba shares have risen 7 percent so far this year, underperforming a 15% gain in Tokyo’s electronic machinery subindex. Before the results, they closed down 1.1% against a 3.1% fall in the benchmark Nikkei average.