Toshiba Turns to Profit on Flash-Memory Chip Demand, Weaker Yen

Toshiba Corp. (6502), the Japanese maker of flash-memory chips, elevators and steam turbines, posted a larger-than-expected profit because of higher semiconductor prices, a weaker yen and rising sales of power equipment.

Net income totaled 29.3 billion yen ($322 million) in the three months ended Dec. 31, compared with a loss of 11.5 billion yen a year earlier, the Tokyo-based company said in a statement today. Profit was expected to be 12 billion yen, based on the average of four analyst estimates compiled by Bloomberg. Sales fell 6 percent to 1.36 trillion yen.

Toshiba, the world’s second-biggest maker of flash memory, benefited from rising chips prices caused by production cuts and rising sales of mobile devices such as Apple Inc. iPads. The company also gained from the yen’s slump, which boosted the value of overseas sales and assets, and demand for gas-fired power stations following the 2011 Fukushima nuclear accident.

The company reiterated that it expects full-year net income of 110 billion yen, operating profit of 260 billion yen and 6.1 trillion yen of sales.

Quarterly operating profit at Toshiba’s social infrastructure business, its biggest unit by sales, rose 38 percent to 15.5 billion yen. The division makes thermal and hydropower systems, elevators and medical devices. Separately, the company is in talks with General Electric Co. (GE) to set up a venture to develop and sell thermal-power systems.

Chips Profit

Toshiba’s electronics devices unit, which makes flash memory for Apple products, more than tripled operating profit 28 billion yen. The price of 32-gigabit NAND flash memory rose 9.6 percent to $2.86 in the three months ended Dec. 31, according to DRAMeXchange, Asia’s biggest spot market for the chips. The price began rising after Toshiba, the biggest supplier after Samsung Electronics Co., cut production in July.

The home-appliances unit made a 1.3 billion yen loss, compared with a year-earlier profit, on slumping demand for televisions. The digital-products unit narrowed its loss to 12.4 billion yen.

Toshiba climbed 1.2 percent to 406 yen in Tokyo trading before the earnings release. It has risen 26 percent in the past 12 months, about in line the benchmark Topix Index.

The company is in talks to sell as much as 36 percent of its Westinghouse Electric atomic-power business after being forced to increase its stake in the unit to 87 percent. Toshiba was compelled to buy 20 percent of Westinghouse this month after Shaw Group Inc. used a push option to sell its stake.

To contact the reporter on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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