* Sharp to unveil 3-year revival plan on Tuesday, 0600 GMT
* Will aim to boost supply to Samsung as Apple's growth
* Sharp to post 500 billion yen net loss for year ended on
March 31 -sources
* Sharp to aim for return to 150 bln yen op profit in
By Reiji Murai
TOKYO, May 14 Japanese display maker Sharp Corp
, a supplier to Apple Inc, will aim to boost
sales to the iPhone maker's chief rival Samsung Electronics Co
under a three-year rehabilitation roadmap to secure
The business plan, due for release on Tuesday, will lean
further on banks that last year saved it from failure, as a 200
billion yen ($2 billion) convertible bond will fall due in
September, three sources familiar with the plan told Reuters
late last week.
Sharp will also release full-year earnings figures,
including forecasts for the year to next March 31 when operating
profit is expected to reach 52.9 billion yen, according to the
average estimate of 13 analysts surveyed by Thomson Reuters
The company's plan will target annual operating profit of
150 billion yen by the year to March 2016, helped by expanded
screen shipments to its Korean partner, the sources said. Sharp
posted annual operating profit in the 100 billion to 200 billion
yen range throughout the five years to March 2008, before its TV
and display businesses were battered by overcapacity, a strong
yen, and stiff competition from Korean and Taiwanese rivals.
Sharp was rescued last October by 360 billion yen in
emergency loans from Mizuho Financial Group, Mitsubishi
Financial Group and other lenders. To secure the
bailout, it had to mortgage offices and factories in Japan,
including one that makes screens for Apple's iPad and its latest
The company also agreed to trim its workforce by 10,000
people and seek buyers for overseas assets including TV assembly
plants in China, Malaysia and Mexico.
Sharp will borrow a further 150 billion yen this year from
its banks to help meet its near-term debt obligations, and will
give the lenders a number of senior management positions, the
sources said on condition that they not be identified.
A key challenge for Sharp's recovery, however, is keeping
its factories busy enough to earn profits that will satisfy its
creditors despite slowing growth in its business making screens
for Apple's iPads and iPhones.
Analysts project annual profit growth at Apple to average
less than 5 percent over the next decade, compared with an
average of 60 percent over the past five years.
In January, Sharp had to curtail production of 9.7-inch iPad
screens, hurting output levels and threatening its recovery in
profitability. The Japanese company is preparing to begin
large-scale production next month of screens for Apple's next
iPhone model, the sources said.
Sharp's earnings for the year ended on March 31 are expected
to include a worse-than-forecast 500 billion yen net loss, in
part because it had to write off panel plant assets after
lower-than-anticipated production levels left it with excess
capacity, sources familiar with the situation told Reuters early
In a March agreement with Samsung Electronics that provided
cash-strapped Sharp 10.4 billion yen in capital in return for a
3 percent stake, Japan's leading liquid crystal display
fabricator also promised to supply small display screens to the
world's biggest maker of mobile phones.
An earlier plan for Hon Hai Precision Industry, a
Taiwanese company that builds many of Apple's gadgets, to buy
9.9 percent of Sharp unravelled as the Japanese company balked
at relinquishing any managerial control to its prospective
Although Hon Hai and Sharp have said they remain in contact,
cooperation for now is limited to their shared ownership of the
world's most advanced LCD plant in Sakai, western Japan, and a
plan to jointly sell smartphones in China.
Sharp in December also sought help from mobile chipmaker
Qualcomm Inc, agreeing to sell an equity stake for $120
million. The two companies plan to develop new screens based on
Sharp's power-saving IGZO panel technology.
Sharp's shares have staged a turnaround since sinking to
their lowest in more than three decades last October while it
struggled with debt and sought a bailout.
Since mid-November, its share price has more than tripled,
compared with a 70 percent rise in the benchmark Nikkei average
. It surged 12.4 percent on Monday to close at 506 yen,
its highest close in more than a year.
The company will release its latest earnings results and
forecasts for the current business year at 3 p.m. (0600 GMT).
Its president, Takashi Okuda, will hold a news briefing at 0800
GMT to present the three-year business plan.