UPDATE 2-Tokyo Electron poised for big swing to profit-Nikkei

* To post op profit of about Y60 bln in 2010/11-Nikkei

* Nikkei projection short of market consensus of 80.5 bln yen

* Shares fall 1.8% on weak stock market,profit-taking -trader

(Adds company comment, share price, background)

TOKYO, April 16 (BestGrowthStock) – Chip equipment maker Tokyo
Electron Ltd (8035.T: ) will likely post an operating profit of
about $645 million this year, rebounding to profitability on a
recovery in semiconductor demand, the Nikkei business daily said.

But shares in Tokyo Electron, the world’s second-largest chip
equipment producer after Applied Materials (AMAT.O: ), slipped 1.8
percent to 6,440 yen after the report, which would represent a
weaker recovery than analysts have been expecting.

Tokyo Electron was seen as ripe for profit-taking after
climbing to 6,670 yen on Wednesday — the stock’s highest in
nearly two years — as investors factored in a pick-up in
spending by chipmakers due to an improving global economy.

It was also dragged lower by a slide in the broader stock
market, with the Nikkei average (.N225: ) down 0.5 percent.

“The stock is being weighed down by the negative turn in
overall market sentiment. Investors appear to be taking profits
after the stock hit its high for the year on the 14th,” said a
trader at a Japanese brokerage who asked not to be identified.

The Nikkei’s projected operating profit of 60 billion yen
($645 million) falls short of the market consensus of an 80.5
billion yen profit in the year to March 2011, according to a poll
of 20 analysts polled by Thomson Reuters I/B/E/S.

A spokesman for Tokyo Electron, which is forecasting a loss
of 4.5 billion yen for the year that ended last month, said the
Nikkei’s figures were based on the newspaper’s own speculation.
The company is due to announce earnings on May 12.

Tokyo Electron’s sales will likely jump to 630 billion yen in
the current year, from an estimated 419 billion yen in the past
year, helped by solid Chinese demand for semiconductor and LCD
panel manufacturing equipment, the Nikkei said.

Chip companies are emerging from a prolonged slump, with
makers of dynamic random-access memory (DRAM) chips set for a
full-blown revival this year, as the improving global economy
lifts corporate demand for computers.

That has encouraged them to boost capital spending to fend
off rivals, a boon for Tokyo Electron, which has received new
orders from South Korea’s Samsung Electronics (005930.KS: ) and
Taiwan’s TSMC (2330.TW: ) and UMC (2303.TW: ). [ID:nTOE60Q08E]

Money

(Reporting by Abhinav Sharma in Bangalore, Nathan Layne and
Akiko Ishiwata in Tokyo; Editing by Anne Pallivathuckal and
Joseph Radford)

UPDATE 2-Tokyo Electron poised for big swing to profit-Nikkei