Sharp says October-December profit better-than-forecast, Hon Hai talks ongoing
OSAKA, Japan (Reuters) - Sharp Corp had a better-than-expected operating profit for October-December, its top executive said on Monday, as the struggling Japanese consumer electronics giant scrambles to generate profits in the hopes of securing fresh financing.
The maker of Aquos brand TVs is projecting an operating profit in the October-March second half of its business year. That would unlock additional funds from banks, after the company won a $4.4 billion bailout from its lenders in October.
Sharp warned in November that it might not be able to survive on its own after doubling its full-year net loss forecast to $5.6 billion.
The October-December operating profit was bigger than planned, thanks mostly to higher revenue from large household appliances and a slight pickup in LCD TV sales, Sharp's president Takashi Okuda told a group of reporters in Osaka.
Sharp posted an operating loss of 24.5 billion yen ($278 million) in October-December 2011.
Okuda's comments came after the trading close on Monday. Sharp ended 4.4 percent lower, versus an 0.8 percent loss in the benchmark Nikkei average.
Sharp shares lost more than half their value in the 2012 calendar year, against a 23 percent rise in the Nikkei index.
Okuda also said the consumer electronics maker was still in talks with Taiwan's Hon Hai Precision Industry Co Ltd on getting a capital investment.
Sharp has been in discussions for months with Hon Hai to make the Taiwanese company its biggest shareholder. Talks, however, stalled after Hon Hai said it expected a say in Sharp's management in return for its investment.
The maker of a slew of electronics products and their components may also sell its TV assembly plant in Mexico to Hon Hai, although talks to sell the Taiwanese company another factory in China have frozen, a source familiar with the matter told Reuters in December.
In December, Qualcomm Inc agreed to invest as much as $120 million in Sharp, giving it a boost in its effort to remain viable. As part of the agreement Qualcomm, through its Pixtronix subsidiary, will work with Sharp - which supplies screens to Apple Inc for its latest iPhone - to develop new power-saving screens based on Sharp's IGZO technology.
Qualcomm made an initial investment of 4.93 billion yen at the end of December in a private placement of stock, giving the U.S. company a 2.64 percent stake after dilution. The timing and amount of the remaining investment will be conditional on Sharp returning to profit.