Japan's Toshiba Corp's quarterly profit more than doubled, driven by a boom in sales of NAND flash memory chips and liquid-crystal displays used in tablets and smartphones but it stuck with its full-year outlook.
South Korean rival Samsung Electronics, which last week reported its weakest profit in six quarters is also expected to benefit this year from booming demand for smartphones and tablets.
Smartphones are selling well, making demand for (Toshiba's) memory products strong, said Tomomi Yamashita, fund manager at Shinkin Asset Management.
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 across businesses from nuclear power stations to home appliances.
Toshiba, the world's second-largest supplier of NAND chips, lowered its full-year sales target but lifted its net and pretax profit estimates because of an increase in non-operating income. It retained its full-year operating profit forecast.
Although the company has so far recorded higher operating income than originally anticipated, mainly as a result of healthy performances in memories, the LCD business and PC business, the direction of system LSIs is still uncertain at this point, the company said in a statement.
Toshiba left its full year operating profit forecast unchanged at 250 billion yen ($3.05 billion), compared with an average estimate of 269.9 billion yen based on 22 analysts polled by Thomson Reuters I/B/E/S.
It lowered its full-year sales outlook 5.7 percent to 6.6 trillion yen but raised its net income forecast to 100 billion yen from 70 billion yen.
To lower costs and cut its exposure to system LSI chips Toshiba said in December it would outsource output of some system chips to Samsung and sell a factory in Japan to Sony Corp as it reduces its non-memory chip exposure.
For the three months ending December 31, Toshiba posted operating profit of 37.5 billion yen profit, compared with 14.5 billion yen a year ago. In the quarter, electro nic devices, including LCDs and flash memory, generated 17.2 billion yen in operating income after a loss 6.6 billion yen a year earlier.
Toshiba also benefited from better-than-expected sales of televisions, after the Japanese government offered consumers incentives to buy sets that consume less power, the head of Toshiba's TV unit said earlier this month.
That performance, however, was not as strong as analysts had expected, coming in lower than the average forecast of 50.2 billion yen in a survey of 5 analysts by Thomson Reuters
Toshiba also competes with Hewlett-Packard and Dell in personal computers.
Toshiba shares rose to their highest level in more than eight months last week, but fell 3.2 percent on Monday to 485 yen, ahead of the earnings report. That compares with a 1.2 percent fall in the Nikkei stock average.
(Editing by Dhara Ranasinghe and Anshuman Daga)