Toshiba Raises Operating Profit Forecast Amid Chip Price Rally
Toshiba Corp. (6502), the Japanese maker of products from televisions to nuclear reactors, raised its full-year operating income forecast by 12 percent amid a rally in memory-chip prices.
Operating profit will be 290 billion yen ($2.9 billion) in the 12 months ending March 31, compared with a previous projection of 260 billion yen, the Tokyo-based company said in a statement today. The company kept its net income forecast at 100 billion yen.
Toshiba is restructuring its TV business by outsourcing production after the division lost about 100 billion yen in the past two years, hurt by competition from other makers including Samsung Electronics Co. (005930) President Hisao Tanaka is seeking to expand in health-care and power generation as he boosts the semiconductor unit to tap higher prices.
The company also reported first-half earnings today, with net income falling 14 percent to 21.5 billion yen in the six months ended Sept. 30.
Toshiba said it found improper accounting at its medical systems unit. A director of the business was fired and an accounting manager is suspended from working as the company improves internal controls, it said in a statement.
In August, Toshiba said operating earnings would rise to 400 billion yen for the year ending March 2016 from 193.4 billion yen last fiscal year. The company is targeting sales of 600 billion yen from health-related businesses in the year ending March 2016. It plans to raise sales from the division to 1 trillion yen in the year ending March 2018.
Toshiba this month said it wants to buy a majority stake in the British nuclear venture NuGeneration Ltd. and plans to make a decision before the end of 2013. NuGen is owned by European utilities GDF Suez (GSZ) SA and Iberdrola SA (IBE) and plans to develop a nuclear plant at Moorside in northwest England.
A Sept. 4 fire that cut production at an SK Hynix Inc. chip factory in Wuxi, China, may lead to higher earnings for other producers, Nam Dae Jong, a Seoul-based analyst at Hana Daetoo Securities Co., said Oct. 29.
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