Toshiba’s Thursday report showed a 76 percent increase in its second-quarter operating profit on Thursday, improved by its memory chip unit’s strong performance which the company recently managed to sell for $18 billion.
The agreement came in late September in a desperate attempt to gain funds to cover liabilities building from its U.S. nuclear unit Westinghouse. The world’s second biggest producer of NAND flash memory chips sold it to a group led by Bain Capital.
In order to speed up the installation of a memory chip assembly line at Yokkaichi, Toshiba stated that it would up its capital investment in the chip industry for this financial year from the previous outline of 400 billion yen to 600 billion yen.
The company showed that its operating profit for the July-September quarter jumped to 135.08 billion from 76.88 billion yen the previous year. That beat estimate of 124.47 billion yen acquired from the prediction of five analysts.
The struggling industrial conglomerate disclosed that its operating profit forecast for the year ending March is at 430 billion yen, compared to the 480 billion yen average of estimates from analysts.
Toshiba said it expects an annual net loss of 110 billion yen caused by taxes related to the acquisition of the memory chip unit which does not reflect expected earnings from the 2 trillion yen sale as the progress of the deal has yet to receive regulatory approval.
West Digital and Toshiba’s Joint Ventures
U.S. hard-drive maker’s chief executive, Steve Milligan, expressed on Wednesday his company’s commitment about its joint ventures with Toshiba and is willing to ensure that they can “continue to be successful.”
The speech he delivered at the Nikkei Global Management Forum in Tokyo, comes in spite of the dispute over Toshiba’s sale of Toshiba Memory, its profitable memory unit, to a Bain Capital led consortium. Western Digital and Toshiba have a joint venture that possesses production equipment at the Japanese conglomerate’s flagship chip factory in Yokkaichi, located in central Japan.
“The commitment to the longevity and the success of the joint ventures is our No.1 priority,” he stated. “We are very resolved to making sure that things get resolved in a way that enables our joint ventures to continue to be successful well into the future.”
Emphasis on the importance of West Digital and Toshiba’s relationship is stressed by Milligan as it mattered to both parties, also adding that his side is “very committed to the joint ventures they have with Toshiba Memory”. He suggested that both sides should continue finding ways to improve each other.
BWorldFinance is your primary source of news in the financial market, technology, and more. Visit bworldfinance.com now and get the latest happenings on the market.