Toshiba cuts operating profit outlook on quake

Japan's Toshiba on Tuesday said its sales and operating profit forecast for the financial year ended March would miss earlier projections due to last month's earthquake and tsunami. The firm lowered its forecasts due to the impact of the March 11 disasters and the power supply problems they triggered, forcing some domestic plants to shut down and lowering production. "Toshiba?s forecast of consolidated sales and operating income will fall short of projections announced on January 31, 2011, due to the impact of the Great East Japan Earthquake," it said in a statement. Supply chains have been broken and power shortages have hit production across key industries, with the impact of the March 11 disasters threatening to throw an export-driven economy into a temporary recession, analysts say. Many key component manufacturers are based in the worst-hit regions of Japan, their facilities damaged by the 9.0 magnitude earthquake or inundated by the giant wave that followed. The shortage of key parts has hit companies worldwide and hit production across Europe, the United States and Asia. Toshiba said it now expects to post an operating profit of 240 billion yen ($2.9 billion), a four percent decrease from its January forecast for 250 billion yen. It cut its revenue outlook to 6.4 trillion yen from 6.6 trillion. The electronics giant, whose business spans consumer electronics and nuclear reactors, was forced to close a chip-making factory in Iwate Prefecture in Japan's quake-hit northeastern region, which has since partially resumed production. Toshiba is the world's second largest maker of flash memory chips used to store data in hot-selling smartphones, tablet devices and various other consumer electronics, after Samsung Electronics of South Korea. It was also forced to shutter a factory making small liquid crystal display panels at its factory in Saitama Prefecture, north of Tokyo. The plant partially resumed production on March 28 and is to hit full volume by end of this month. However, on Tuesday Toshiba also raised its net profit forecast for the fiscal year that ended last month to 135 billion yen, from 100 billion yen predicted in January, citing smaller-than-expected "non-operating" expenses. It is scheduled to release its earnings for the period on May 9.