TOKYO -- Toshiba's operating profit for the half year through September increased about sevenfold from the year-earlier period to 52 billion yen ($476.4 million), the company said on Wednesday. It is Toshiba's highest operating profit for the six months in three years.
The company's infrastructure, energy and digital businesses moved into the black, helped by cost-cutting measures.
Toshiba had failed to achieve its initial forecasts for the two previous fiscal years. But with the recent announcement, investors are likely to react favorably, at least in the short-term, though concerns are likely to linger regarding medium to long-term growth potential.
Sales fell 4% on the year to 1.71 trillion yen. This was put down to Toshiba selling its PC business to Sharp last fall as well as to the company changing its policy to focus on orders that can be delivered more profitability. Toshiba's six leading divisions posted operating profits. A year earlier, three of the divisions were in the red.
Meanwhile, the company fell into a net loss of 145.1 billion yen, dragged down by about a 90 billion-yen loss on the sale of a U.S. liquefied natural gas business in the April-June quarter.
Poor earnings at Kioxia Holdings, formerly Toshiba Memory Holdings, in which the company has a 40% stake, were due to a sluggish memory market.
The company left its consolidated net profit forecast for the fiscal year through March unchanged at 140 billion yen, a 290% increase from a year earlier. Investors' focus is centered on "whether Toshiba's full-year operating profit will exceed the company's forecast of 140 billion yen," said an analyst at a foreign-affiliated brokerage.
Investors are expected to respond positively to Toshiba keeping its earnings forecast intact. At its earnings announcement a year ago, the company revised down its full-year forecast.
Toshiba also said it intends to make tender offers to and make wholly owned units of Toshiba Plant Systems & Services, marine electrical systems maker Nishishiba Electric and chipmaking equipment producer NuFlare Technology.
Toshiba already holds major stakes in the three companies.