Tokyo Electron lifts 2008/09 guidance on cost cuts

TOKYO, April 28 (Reuters) - Japan's Tokyo Electron Ltd (8035.T), the world's No.2 supplier of chip making equipment, doubled its operating profit guidance to far above the market consensus, as it tallied up cost cuts and a lower tax burden. Tokyo Electron said on Tuesday it now expects to log an operating profit of 14.7 billion yen ($153 million) for the year ended in March, up from its previous estimate of 7 billion yen, even as its orders in January-March slid to a seven-year low.

The new estimate means a 91 percent drop in profit from the preceding year, but it beats the mean estimate of a 3.7 billion yen profit by 17 analysts polled by Thomson Reuters.

Tokyo Electron, which competes with Applied Materials Inc (AMAT.O), is grappling with shrinking sales as clients such as Intel Corp (INTC.O), Samsung Electronics Co Ltd (005930.KS) and Toshiba Corp (6502.T) slash spending.

It still expects to book a roughly 45 percent fall in revenues for the past financial year, but it saved by cutting bonuses, development costs, travel expenses and other fees.

"Each cost is very small on its own but they add up," said Kazuya Nanbu, director of Tokyo Electron's communications department.

Tokyo Electron said it also expects a boost from smaller-than-expected taxes on subsidiaries abroad.

It now expects to book a net profit of 7.5 billion yen, up from a previous estimate of 800 million yen and down 93 percent from the preceding year.

Prior to the announcement Tokyo Electron's shares closed down 1.7 percent at 4,120 yen, against a 4.1 percent fall in the Tokyo bourse's electrical machinery index .IELEC.T. ($1=96.33 Yen) (Reporting by Mayumi Negishi; Editing by Michael Watson)