Toshiba the world’s second- largest flash-memory chipmaker, cut its full-year operating profit forecast 13 percent amid weaker sales of semiconductors and as a stronger yen erodes overseas earnings.
Operating income may total 260 billion yen ($3.3 billion) for the year ending March 31, compared with the previous estimate of 300 billion yen, the Tokyo-based company said in a statement today. The forecast matches the 260 billion yen average of 20 analysts’ estimates compiled by Bloomberg.
Toshiba, a supplier to Apple Inc. (AAPL), began cutting production of NAND flash memory last quarter for the first time in three years as weakened demand for data storage devices led to a glut. The company, which today posted a 24 percent gain in first-half profit, is also moving its liquid-crystal-display TV assembly operation overseas to cut costs.
“Toshiba group’s business expects lower net sales and operating income than indicated in previous forecasts,” the company said in an e-mailed statement. “There are concerns that a sharp austere financial policy in the United States will add to downward momentum.”
Toshiba, with businesses including nuclear reactors, consumer electronics and home appliances, said in July that every 1 yen gain against the dollar and euro cuts annual operating profit by 5 billion yen.
Higher Currency
The Japanese currency has averaged 79.2 yen to the dollar since April 1, compared with the 85.7 yen average last fiscal year. The euro averaged 100.86 yen so far this fiscal year, compared with 113.22 yen in the previous 12 months.
Toshiba shares rose 4.6 percent to 296 yen at the close of trading in Tokyo, paring this year’s decline to 6 percent. The earnings announcement was made after markets closed.
Net income rose to 25.2 billion yen in the six months ended Sept. 30 from 20.3 billion yen a year earlier, Toshiba said in an e-mailed statement today.
Full-year net income is expected to rise 49 percent to 110 billion yen, 19 percent less than its previous forecast of 135 billion yen, the company said today.
Toshiba, the biggest maker of NAND flash memory after Samsung Electronics Co. (005930), has reduced production by 30 percent since July. Demand for storage cards used in mobile devices including cameras and USB memory slumped amid economic weakness in Europe, prompting Toshiba to cut output at its Yokkaichi factory in Japan, the company said in July.