Toshiba cuts forecast on global economy worries
TOKYO (Reuters) - Japan's Toshiba Corp (6502.T) cut its full-year operating profit forecast by 13 percent to 260 billion yen ($3.3 billion) on Wednesday, saying the uncertain global economy weighed on its prospects.
The company said the continuing European debt crisis, slowdowns in China and India, and a strong yen were combining to "increase uncertainty about the future."
For the July-September period, Toshiba posted an operating profit of 57.5 billion yen, slightly better than expected, but down 23 percent from a year ago due to revenue and profit declines in its semiconductor, television and home appliance segments.
That compared with an average operating profit forecast of 55.5 billion yen by four analysts surveyed by Thomson Reuters I/B/E/S.
Toshiba, Japan's leading chipmaker, saw operating profit for its electronic device segment, which includes its NAND memory chip business, drop 28 percent to 27.6 billion yen in the six months to September.
Its NAND chip business returned to profit in the three months to September, though it lost money in the April-June quarter, said Executive Vice President Makoto Kubo. The performance of the sector was the biggest single swing factor in Toshiba's results. Toshiba's NAND chips are used in Apple Inc's (AAPL.O) iPhones and tablet devices.
Toshiba, which cut NAND chip output at its main plant by 30 percent after seeing a supply glut its earlier this year, will continue production cuts in the October-March period, but by less, Kubo said.
"We were able to bring the memory chip business back into profit in the second quarter, though the profit level is still not sufficient," he told reporters at a briefing. NAND operating profit in the second quarter was between 10-99 billion yen, though much closer to 10 billion yen, he added.
Toshiba's biggest rival, Samsung Electronics Co Ltd 00593.KS, forecast last week global shipments of NAND chips to grow in the mid-20 percent range in the current quarter, led by new mobile product launches.
Toshiba booked a 3.6 billion yen loss in its digital products segment in April-September, largely due to a major drop in LCD television demand in Japan.
It also cut its television sales target by 19 percent to 13 million units and said the television business will probably be in the red for the financial year, although it may eek out a profit in the fourth quarter, Kubo told reporters.
In May, Toshiba said it aimed to more than double its annual operating profit in three years by expanding its social infrastructure business, which makes products ranging from elevators to medical systems to nuclear power plants, and by boosting sales of electronic devices.
The social infrastructure segment posted a record-high operating profit of 49.7 billion yen in the April-September quarter.
Shares of Toshiba, which competes with Hynix Semiconductor Inc (000660.KS) in semiconductors and with General Electric Co (GE.N) and Areva SA (AREVA.PA) in nuclear reactors, closed up 4.59 percent ahead of the results. Tokyo's benchmark Nikkei .N225 closed up 0.98 percent.
(Reporting by Mari Saito; Editing by Matt Driskill)