Reuters | January 31, 2011 | Isabel Reynolds
(Reuters) - Japan‘s Toshiba Corp (6502.T) more than doubled its quarterly operating profit on booming sales of NAND flash memory chips and robust demand for LCD panels used in smartphones and tablets.
But the sprawling conglomerate cut its full year sales forecast and left its operating profit outlook unchanged for the year to March, citing a strong yen and uncertain demand for some of its other products, which include everything from home appliances to nuclear power plants.
South Korean rival Samsung Electronics (005930.KS), is expected to benefit this year from booming demand for smartphones and tablets, but Toshiba’s hiving off of its mobile phone division may have improved its chances of maintaining close ties with Apple.
“I think they are still able to compete in semiconductors, although it is a very difficult market,” analyst Yoshiharu Izumi of JP Morgan said of Toshiba.
“Samsung faces the problem of rivalry with Apple. That is something that will help Japanese makers.”
Toshiba CEO Norio Sasaki, who took the helm some 18 months ago, has vowed to sharpen the focus of the sprawling conglomerate and has taken a hard line on costs, with rival Samsung firmly in his sights.
For the three months to December 31, Toshiba reported a 37.5 billion yen profit, compared with 14.5 billion yen a year ago. In the quarter, electronic devices, including LCDs and flash memory, generated 17.2 billion yen in operating income after a loss 6.6 billion yen a year ago.
Overall performance, however, was not as strong as analysts had expected. The profit came in lower than the average forecast of 50.2 billion yen, but the discrepancy had been flagged by Japanese media at the weekend.
Toshiba’s full year profit on NAND chips is expected to be than the company had foreseen at the start of the financial year, as profit margins improve after sagging in the third quarter, Fumio Muraoka, a senior executive at Toshiba told reporters on Monday.