Toshiba more than doubles profit outlook for H1 as yen drives sales

Toshiba Corp raised its forecast for first-half operating profit to ¥70bn ($696mn) from ¥30bn, crediting growth in storage and electronic devices for a more than doubling of its earnings outlook.
A weaker-than-expected yen and sales of hard drives and smartphone memory are the main factors, the Japanese company said in a statement yesterday. Toshiba’s shares climbed as much as 4.7% in Tokyo as of 1:40pm.
Toshiba, which makes everything from computers to nuclear power equipment, in August reported its first operating profit in six quarters. The manufacturer is cutting thousands of jobs, shedding operations and narrowing the scope of its businesses to recover from an accounting scandal that upended the Tokyo-based company and its management. The company said demand from PC and game console manufacturers boosted sales of hard drives. It may have also benefited from supplying memory chips to Apple Inc.
“Apple’s recent upgrades to its smartphone embedded memory have also helped Toshiba’s cause,” Amir Anvarzadeh, Singapore-based head of Japanese equity sales at BGC Partners Inc, wrote in an e-mailed note. “Many analysts have already upgraded the name and their forecasts in anticipation of this revision.”
The company kept its forecast for ¥100bn in net income and ¥120bn of operating profit for the fiscal year ending March 2017. That compares with the ¥135bn and ¥165bn averages of analyst estimates compiled by Bloomberg. The company in August forecast the yen to trade at 100 to the dollar and 110 against the euro in the quarter ending Sept. 30. The Japanese currency has on average traded at 102.4 to the greenback to 114.3 to the European currency during the period.
Toshiba also raised its net income outlook for the first half by 21% to ¥85bn and increased the sales forecast by 3.2%.