Toshiba sees annual profit up 25 percent

By @ibtimes on

Toshiba Corp <6502.T>, Japan's biggest chipmaker, said it expected its annual operating profit to rise by 25 percent, roughly in line with market expectations, but that outlook could be in jeopardy if potential power outages threaten its mainstay flash memory chips.

Toshiba rushed to secure key supplies following the March 11 quake and tsunami and is eyeing normalized production by the second half of this financial year to win back clients planning to reduce dependence on Toshiba chips.

But now, Prime Minister Naoto Kan's call to shut down Chubu Electric's <6502.T> Hamaoka plant could disrupt production at Toshiba's key Yokkaichi plant in central Japan.

Japan's first electric light bulb maker expects to earn an operating profit of 300 billion yen ($3.7 billion) in the year to March 2012, which compares with the 298.3 billion yen Thomson Reuters Starmine SmartEstimate, which places more weight on recent forecasts by top-ranked analysts.

Toshiba's quarterly operating profit was 98.0 billion yen in January-March, which was in line with market expectations after the company pre-announced its earnings last month.

Prior to the quake, Toshiba was hit by a power outage at its Yokkaichi plant on March 8, which prompted joint venture partner SanDisk Corp to take a $25 million charge at its results announcement last week.

After the quake, which knocked out suppliers and temporarily halted production of Toshiba's mobile displays and chips used in home appliances, SanDisk and major client LG Electronics Inc <066570.KS> said they would diversify chip suppliers away from Toshiba.

Prior to Monday's announcement, Toshiba shares fell 1.4 percent against a 0.3 percent fall in Tokyo's electrical machinery subindex <.IELEC.T>.

Its shares since the quake have fallen 11 percent against a 6 percent fall in the subindex. ($1 = 80.630 Japanese Yen)

(Reporting by Mayumi Negishi; Editing by Muralikumar Anantharaman)

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