(Updates with share price in fourth paragraph.)
Jan. 31 (Bloomberg) -- Toshiba Corp., the world’s second- largest maker of flash memory chips, cut its profit forecast 54 percent, citing a stronger yen, floods in Thailand and concerns about European economies.
Net income may total 65 billion yen ($852 million) for the year ending March 31, compared with Toshiba’s earlier estimate of 140 billion yen, the Tokyo-based company said in a statement today. That lagged behind the average 119 billion-yen profit estimate of 21 analysts tracked by Bloomberg. Toshiba also cut its sales forecast to 6.2 trillion yen from 7 trillion yen.
The maker of Regza televisions, aerospace components, nuclear reactors and notebook computers, cut production of single-function chips last quarter to meet lower demand from the economic slowdowns in the U.S. and Europe. Toshiba and other Japanese exporters have been hurt as the yen strengthens against the dollar and euro, reducing the value of repatriated revenue.
Toshiba fell 1.8 percent to 323 yen in Tokyo trading before the earnings announcement.
A stronger yen and the impact from Thailand’s worst floods in almost 70 years contributed 40 billion yen each to lowering the forecast operating profit, Makoto Kubo, executive vice president at the company, told reporters in Tokyo.
Global Computer Shipments
Honda Motor Co., Japan’s third-largest carmaker, also lowered its full-year profit forecast after the Thailand disaster idled Southeast Asian output. The floods also disrupted production for Toyota Motor Corp.
Toshiba is reorganizing production of less-profitable discrete semiconductors, which are used for single functions such as transistors. The company will shut three factories that make discrete chips in Japan and transfer about 1,700 workers by the end of September, it said in November.
Toshiba had a loss of 10.6 billion yen in the three months ended Dec. 31, compared with a profit of 12.4 billion yen, the company said in a statement today.
Worldwide PC shipments declined 1.4 percent to 92.2 million units in the three months ended Dec. 31, Gartner Inc. said earlier this month, citing sluggish consumer demand. Prices for 32-gigabit NAND flash dropped about 47 percent during the past year, according to data from Taipei-based Dramexchange Technology Inc.
--With assistance from Garry Smith in Hong Kong. Editors: Anand Krishnamoorthy, Frank Longid
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