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Toshiba in turmoil

Toshiba first-half results show flagging post-chip earning power

Operating profit drops 80% after sale of semiconductor business

Toshiba's latest restructuring plan helped push its shares more than 10% higher during Nov. 8 trading.

TOKYO -- Toshiba on Thursday announced lackluster results for the April-September term, with operating profit falling 80% as the company struggled to adapt to life without its memory chip business -- hitherto a major income generator.

Operating profit for the half came to 6.9 billion yen ($61 million). Sales were down 5%, at 1.77 trillion yen, with the energy business still weighing on the Japanese conglomerate.

Toshiba's net profit totaled 1.08 trillion yen, thanks to gains from the sale of the chip business in June. The company anticipates a 14% jump in net profit for the full year through next March, to 920 billion yen. But that is expected to come with an 8.8% drop in sales, to 3.6 trillion yen.

Toshiba sold the semiconductor business to cover massive losses from the bankruptcy of U.S. nuclear power subsidiary Westinghouse Electric. The company is rushing to restructure itself, with a plan to cut 7,000 jobs globally over the next five years, according to a plan also announced on Thursday.

The group is poised to sell its U.S. liquefied natural gas business to a Chinese private gas company, escaping the effects of volatile LNG prices.

Toshiba shares jumped in early trading, after news of the restructuring plan spread. The stock at one point rose 6% from the previous day.

The price surged even more after the official announcement of the restructuring, the April-September earnings and a stock buyback, which came at noon. After that, the price increase reached nearly 12%, to 3,745 yen.

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