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Increased demand for power distribution systems
and railroad network equipment is expected to help profit at its
energy and infrastructure unit double. While income from
semiconductors is expected to fall, it will still account for
more than half of operating profit.
Toshiba, a leading supplier of flash memory chips used in
smartphones and tablet computers, predicted operating income of
330 billion yen ($3.2 billion) in the year ending March 31, also
boosted by an expected rebound in consumer appliances such as
TVs and computers.
The guidance, however, fell short of an average estimate of 355
billion yen from 22 analysts surveyed by Thomson Reuters. In the
business year just ended, it posted an operating profit of 291
billion yen, 47 percent higher than the previous year.
Toshiba's power grid business is set to be in focus after the
Nikkei business daily said the Japanese conglomerate will offer
to buy Alstom's power grid unit if General Electric Co purchases
the French firm's energy business.
Alstom, which is reviewing GE's offer, has given Germany's
Siemens AG until the end of May to make a rival bid.
"We are always considering M&A options to forward our business
and we can't deny the possibility of something happening in this
area, but in regard to Alstom there is nothing concrete," a
spokesman for Toshiba said.
The earnings gains come despite a slump for its nuclear power
operations. Toshiba, which in 2006 bet big on a revival in
nuclear power with the acquisition of pressurized reactor
builder Westinghouse, has struggled to win business since the
2011 Fukushima disaster.
On Wednesday it wrote down more than $300 million on the value
of its 10 percent stake in Nuclear Innovation North America, a
company planning to build two new reactors at the nuclear plant
in Texas because of uncertainty over regulatory approval of the
project.
But China may soon provide a boost as it may sign as early as
next year the first of several contracts for eight new nuclear
reactors from Westinghouse Electric Co. The eight projects,
including machinery and services, are expected to cost $24
billion.
(Reporting by Tim Kelly; Editing by Edwina Gibbs)
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