Japanese chipmaker Toshiba Corp. presented better-than-expected profits for the second quarter on Thursday, as it saw robust performance from its semiconductor manufacturing business, which the company is racing to complete the sale before the end of March.

In the three months ended September 30, Toshiba’s operating income nearly doubled, growing as much as 76 percent from last year’s ¥76.88 billion to ¥135.08 billion ($1.2 billion), beating analysts’ expectation of ¥124.47 billion.

Net sales climbed 2.4 percent year-on-year to ¥1.24 trillion ($10.93 billion), compared to ¥1.21 trillion in the same period a year ago.

The Tokyo-based company’s  storage and electronic devices solutions division was mainly responsible for the growth as its sales rose to ¥515.65 billion ($4.54 billion), which was 20.4 percent higher than ¥428.12 billion in the previous year.  

Toshiba said that the continued rise of its memory chip business, along with significant improvements over the past quarter and higher sales in its other divisions have supported the segment’s growth in the period.

Toshiba’s Full-Year Forecast Remains Unchanged

Following the release of its second-quarter profits report, the chipmaker has kept its full-year forecast, with estimated operating profit at ¥430 billion ($3.78 billion).

It also expects an annual net loss of ¥110 billion ($968 million) on account of a ¥340 billion tax impact associated with the sale of its semiconductor unit, which does not reflect estimated gains from the ¥2 trillion sales as the deal is still subjected to regulatory approval.

The market expected that the company would bring in operating profit for the year ending March of ¥480 billion and a net income of ¥427.4 billion on sales of ¥5.06 trillion.

Toshiba to Accelerate Set Up of Memory Chip Factory

Toshiba would be increasing its planned investment in its memory chip business by half, after bringing in profits higher than market’s forecasts.

The storage solutions developer said that it would boost its investment by 50 percent from the previous ¥400 billion to ¥600 billion ($5.28 billion), in order to speed up the construction of its flash memory facility in Yokkaichi.

Toshiba’s Memory Chip Unit Sale

Toshiba agreed in late September to sell its US memory chip unit, Westinghouse, to a group led by private equity firm Bain Capital for ¥2 trillion ($17.6 billion), so that it will have the funds to make up for the liabilities stemming from the unit.

The company is still on the process of completing the deal and it has to get it done before the end of March next year if it wants to stay listed on the Tokyo Stock Exchange.

Toshiba’s chief executive Satoshi Tsunukawa stated that they are working on a contingency plan in case the sale encounters a problem, which could be in the form of legal action from its partner Western Digital.

The storage solutions provider has long been pointing out that it is entitled to have a say in any sale because of its joint venture between its flash memory manufacturer subsidiary SanDisk and Toshiba.

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