TOKYO Japanese electronics conglomerate Toshiba Corp trumped forecasts with a more than doubling of its quarterly profit on Tuesday, boosted by strong overseas earnings from sales of power systems and other energy products despite sluggish chip sales.
Toshiba, Japan's leading chipmaker and the world's No.2 maker of NAND flash memory chips, logged an operating profit of 11.47 billion yen ($147 million) in the April-June quarter, up from 4.12 billion yen a year ago when Japanese firms were hit by the aftermath of the earthquake and tsunami.
The results beat expectations for a profit of around 7.8 billion yen, but the company held steady its forecast for an operating profit of 300 billion yen for the full year to March 2013.
Toshiba said in May it aimed to more than double its annual operating profit in three years by expanding its social infrastructure business, which makes products ranging from elevators to medical systems to nuclear power plants, and boosting sales of electronic devices.
It has already scaled back its loss-making television business, and earlier this month was forced to cut back its NAND memory production by 30 percent due to falling prices of USBs and memory cards, as well as oversupply.
"This quarter (April-June) we saw a particularly large decline in prices for semiconductors, NAND flash memory chips," said Toshiba Corporate Executive Vice President Makoto Kubo at a news briefing.
"In overall electronic devices division sales, hard disk drives and storage sales remained positive, while the strong yen and the declining prices of memory chips cut into its sales," he said.
Toshiba's flagship NAND memory chips, the biggest single swing factor in the company's results, are used in Apple Inc's popular iPhones as well as fast-selling tablet devices.
Toshiba said its electronic devices division, home to the NAND chips, posted first-quarter sales of 307.7 billion yen, down nearly 8 percent on the same period last year.
However, its social infrastructure division posted 500.2 billion yen in sales, up more than 17 percent from 426.9 billion yen a year ago.
Thermal and hydro power systems, as well as other energy-related divisions did particularly well, while elevators and medical use systems sales grew overseas.
The acquisition of Swiss meter-maker Landis + Gyr in 2011 for $2.3 billion also contributed to strong infrastructure sales, the company said.
Toshiba said it booked a pre-tax loss of 14.7 billion yen due to the strong yen, as well as restructuring costs.
Fellow flash memory maker SanDisk Corp said this month it expects NAND chip market conditions to improve in the second half of the year.
Shares of Toshiba, which competes with Hynix Semiconductor Inc in semiconductors and with GE and Areva in nuclear reactors, ended up 2.3 percent at 262 yen ahead of the results. Tokyo's benchmark Nikkei closed up 0.69 percent.
The stock is down nearly 17 percent this year, compared with a small gain in the benchmark index.
($1 = 78.1900 Japanese yen)
(Editing by Richard Pullin)