(Bloomberg) -- Toshiba Corp., the world’s second- largest maker of flash memory chips, posted a smaller operating loss than the company had forecast after production cuts helped ease a glut and drive up prices of the semiconductors.
The operating loss, or sales minus the cost of goods sold and administrative expenses, was 250 billion yen ($2.5 billion) in the year ended March 31, or 11 percent smaller than the company’s previous 280 billion yen loss projection, Tokyo-based Toshiba said today in a preliminary earnings statement.
The results stoked speculation that production cuts are helping reduce the excess supply that’s driven memory chipmakers to record losses. Prices of flash memory chips, which store songs and data in portable musical players and digital cameras, have surged 75 percent since Jan. 29, when Toshiba last made its earnings projections.
“Flash-memory chip prices can sustain these levels for the time being as long as chipmakers continue to scale back production,” Yuichi Ishida, an analyst at Mizuho Financial Group Inc., said by phone today. “Demand for the chips themselves isn’t likely to rise soon because demand for mobile phones and digital cameras is still weak.”
Toshiba rose 3.8 percent to 330 yen at 12:57 p.m. on the Tokyo Stock Exchange. The preliminary results are in line with figures reported by the Nikkei English News earlier today. The company will have a press briefing at 3 p.m. Tokyo time.
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