Japanese high-tech giant Toshiba Corp said yesterday that net profit jumped more than fivefold to a first-quarter record given strong memory chip sales, while NTT DoCoMo Inc reported that net profit slipped 25 percent during the same period because of tough competition and costs to upgrade its network.
With first-quarter sales boosted by robust sales of memory chips used in music players such as Apple's iPod, Toshiba sharply raised its interim earnings forecast and said it was reviewing its full-year targets in light of the strong performance, which came despite a poor report on cellphones and liquid-crystal displays.
Net profit rose to ?20.6 billion (US$174 million) in the three months to June from ?4.0 billion a year earlier, a company statement said.
Operating profit gained a more modest 1.9 percent to ?21.2 billion, while revenue rose 14.6 percent to ?1.66 trillion.
"We posted the highest-ever results for a first quarter," Toshiba vice president Fumio Muraoka told a news conference.
Toshiba saw brisk sales of laptop computers and semiconductors including NAND flash memory chips -- the technology vital to MP3 players such Apple's iPod as well as other consumer electronics.
Prices of flash memory chips have been falling sharply but the pace of the drop has eased recently.
Toshiba hiked its net profit target for the six months to September from ?10 billion to ?40 billion and said it was reviewing its full-year earnings target of ?120 billion.
"The PC business is moving forward more strongly than originally anticipated and the semiconductor business is expected to make firm progress," Toshiba said.
In the first quarter, sales at the electronic devices unit, which includes flash memory, jumped 16 percent while operating profit gained 5.4 percent to ?16.7 billion.
Sales of digital products were up 6.5 percent thanks to strong demand for computers, particularly in the US but that was not enough to prevent the division slumping to an operating loss of ?2.3 billion against the year earlier profit of ?1.9 billion.
"Personal computers performed strongly although cellphones, hard disk drives and liquid crystal display operations worsened," Muraoka said.
Separately, Japan's largest mobile phone operator, NTT DoCoMo Inc, said yesterday its net profit slipped 25 percent in the quarter to June because of tough competition and costs to upgrade its network.
To stave off increasing competition from rivals KDDI Corp and Softbank Corp, the company announced it was launching a discount service.
NTT DoCoMo -- a unit of telecom giant Nippon Telegraph and Telephone Corp -- reported net profit of ?122.8 billion for the three months to June, down 24.9 percent from the same period last year.
Operating income in the quarter tumbled 25.2 percent to ?203.9 billion, while revenue slipped 2.9 percent to ?1.18 trillion.
"Although the figures look poor, the results are largely in line with our expectations," NTT DoCoMo president Masao Nakamura told a press conference.
He said the company invested heavily to compete with rivals, both through marketing and expanding base stations for its trademark third-generation FOMA service.
Competition has intensified sharply in Japan since the introduction last October of "number portability," which lets customers switch carriers without having to change their phone numbers.
But while DoCoMo remained the top mobile company, it said it was stuck in third place in signing up new users, accounting for only 17.6 percent of new subscribers in the first quarter.
Average revenue per user also slid by nearly 5 percent to ?6,560 a month.
DoCoMo said it would lower basic fees for family calling plans by 50 percent starting in September to match discount rates announced earlier by KDDI Corp.
"The new discount plan will cut our annual revenue by ?40 billion but this will not affect profitability," Nakamura said, "because we earmarked reserves in anticipation of stiffer price competition when the current fiscal year began."
With Japan a largely saturated market, DoCoMo said its overseas revenue grew 41 percent year-on-year as it expanded in South Korea and in the US Pacific islands of Hawaii, Guam and Saipan.
The company kept its projections of the year to March 2008, predicting a 4.1 percent increase in net profit to ?476 billion.
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