Sharp to eke out profit on washing machines and printers
TOKYO (Reuters) - Japan's Sharp Corp predicted it will post a meager operating profit this business year as it looks to offset continued losses in its televisions and liquid crystal display business with earnings from household appliances and printers.
The manufacturer of Aquos LCD TVs expects to earn an operating profit of 20 billion yen ($248 million)in the year that started in April compared with a 45 billion yen operating loss in the business year just ended.
Sharp's problems mirror the grim performances at Japan's other major TV makers, Sony Corp and Panasonic Corp. Combined, the three are forecasting losses to reach $21 billion in the business year just ended as consumers switch to TVs made by Korean rivals Samsung Electronics and LG Electronics.
Sharp on Friday reported a record net loss of 376 billion yen for the business year ended in March, below the average estimate of a loss of 383 billion by 11 analysts surveyed by Thomson Reuters I/B/E/S. The company expects a net loss of 30 billion yen for the current financial year.
"The tough environment will continue for us," Tetsuo Onishi, Sharp's general manager in charge of finance, said at a press briefing in Tokyo.
The company forecast TV sales this business year to slump by 19 percent to 10 million units and predicted sales of LCD panels to gain 29 percent as it retools production for smaller screens used in smartphones and tablet PCs.
"The outlook is very tough. It does beg the larger question over its future as a whole," said Mitsuo Shimizu, deputy general manager of investment strategy at Cosmo Securities. "I'm sure they have the world's best technology, but if no one wants to buy them, there's no point," he added.
In a bid to tackle losses at its main LCD plant in Sakai in western Japan, Sharp in March sold Taiwan's Hon Hai Precision Industry a 46.48 percent stake in the facility. Hon Hai also agreed to purchase new shares in Sharp worth 66.9 billion yen, giving it an 11 percent stake.
Sharp's Onishi said the benefits of that alliance had not been accounted for in its forecast.
Sharp's stake in the $4 billion Sakai plant will shrink to less than 40 percent. The company is also in talks with supplier Toppan Printing and Dai Nippon Printing to sell them stakes in the plant.
Sharp, Japan's last major fabricator of TV panels, last month named company veteran Takashi Okuda as president, replacing Mikio Katayama, who became chairman.
Shares of Sharp have declined by 24 percent since the start of the year against an 11 percent gain in the Nikkei 225 index. In trading Friday ahead of its earnings announcement its shares gained 1.2 percent to 516 yen.
($1 = 80.7900 Japanese yen)
(Additional reporting by Mari Saito; Editing by Matthew Driskill)