Toshiba cuts 2010/11 operating profit estimate after quake

By @ibtimes on

Toshiba Corp said on Tuesday it likely fell short of its operating profit estimate for the past business year by 4 percent after last month's massive earthquake and tsunami affected operations at some of its plants.

In a sign that the aftermath of the disaster may continue to cause problems for Toshiba in the current financial year, South Korea's LG Electronics has diversified its chip suppliers to reduce reliance on Toshiba, an LG official told Reuters.

The Japanese electronics maker said on Tuesday it now expects an operating profit of 240 billion yen ($2.9 billion) for the year ended in March, 10 billion yen short of its prior projection.

But the company revised up its net profit estimate to 135 billion yen from 100 billion yen. A spokesman said that restructuring costs had been lower than expected and that the company had sold off some real estate.

The revision had been flagged in a report in the Nikkei business daily and comments this month by Toshiba Chief Executive Norio Sasaki that net profit could exceed previous guidance.

Japan's chip-related shares fell on Tuesday after Texas Instruments missed profit forecasts, blaming damage to its own facilities and shortages of raw silicon and wafers following the quake. Advantest was down 3.2 percent and Renesas fell 5.4 percent.

The latest business year will mark Toshiba's first year in the black on a net basis in three years. It posted a 19.7 billion yen net loss in the year to March 2010.

Toshiba lowered its sales estimate to 6.4 trillion yen for 2010/11 from 6.6 trillion yen, following damage and electricity shortages at factories from the disasters.

Sasaki said last week that he expected the company to bounce back from supply chain woes in the second half of the current financial year to March 2012.

But client LG, which previously sourced more than half its chips for home appliances from Toshiba, is set to buy more from Hynix Semiconductor and Panasonic, the LG official said.

Shares of Toshiba were unchanged on Tuesday, outperforming a 1.2 percent fall in the broader market.

($1 = 82.675 Japanese Yen)

(Reporting by Miyoung Kim, Junko Fujita and Isabel Reynolds; Writing by James Topham; Editing by Chris Gallagher and Joseph Radford)

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