Sharp restructures: Sharp sees 84bn yen net loss for first half
OSAKA — Sharp said Monday it now expects a group net loss of 84 billion yen ($687 million) for the six months ended September, down from the year-earlier 4.7 billion yen net profit, as the Chinese economic slowdown frustrated efforts to put its financial house in order.
The Japanese electronics giant sees April-September sales slipping 4% to 1.27 trillion yen, missing its projection by 30 billion yen. The operating result is seen falling from the year-earlier 29.2 billion yen profit to a 26 billion yen loss, compared with the first-half forecast of a 10 billion yen profit. Slumping demand in China for smartphone LCDs, along with stiffer competition and falling prices, were to blame for Sharp’s reversal of fortune.
The company logged an extraordinary loss of more than 24 billion yen from a voluntary retirement program that took in more than 3,200 participants as part of a restructuring plan put together in May.
For all of fiscal 2015, Sharp slashed its operating profit outlook by 70 billion yen to 10 billion yen — still an improvement from the 48 billion yen loss of fiscal 2014. It also trimmed the sales forecast by 100 billion yen to 2.7 trillion yen, down slightly from last fiscal year. Sharp had expected its liquid crystal display business to pick up starting this summer, but the troubled Chinese operations forced the company to lower sales targets from October onward.
Sharp has been considering spinning off the LCD operations and having them take investment from the public-private Innovation Network Corp. of Japan and Taiwan’s Hon Hai Precision Industry. But with earnings below expectations, the company is also mulling stabilizing its own finances with a direct investment from the INCJ.