August 8, 2018 / 6:30 AM / a month ago

Japan Display's first-quarter loss narrows on cost cuts, but sales dive

TOKYO (Reuters) - Japan Display Inc posted on Wednesday a narrower loss for April-June, helped by cost cuts and a rise in the value of its affiliate, but sales plunged as some Chinese smartphone makers shifted away from its liquid crystal display screens.

FILE PHOTO: Japan Display Inc's logo is pictured at its headquarters in Tokyo, Japan, August 9, 2016. REUTERS/Kim Kyung-Hoon/File Photo

The smartphone screen maker, a supplier for Apple Inc, posted a net loss of 1.77 billion yen ($15.91 million) in the first quarter, much lower than a loss of 31.46 billion yen a year earlier.

The net loss came in lower than 15.44 billion yen estimated by five analysts in a Thomson Reuters I/B/E/S poll.

However, the company’s sales dived 45 percent in April-June, as some Chinese smartphone makers have opted for organic light-emitting diode (OLED) screens. Shipments to Apple have also dropped due to inventory adjustments.

“Sales are expected to jump about 50 percent in the current quarter (from the last quarter), as production of new (liquid crystal display) panels is ramping up,” Chief Financial Officer Takanobu Oshima said.

Many rival companies are seen to invest in the mass production of OLED screens, which could leave Japan Display lagging behind as it plans to manufacture smartphone OLED panels only by 2019.

The Japanese screen maker is keen on having a partner who can help finance the launch of a mass production line, which analysts have said typically costs more than 200 billion yen ($1.8 billion).

The company did not provide a full-year forecast, although it reiterated that it could swing to a profit this financial year. Meanwhile, markets forecast the company to post a net profit of 2.28 billion yen.

Reporting by Makiko Yamazaki; Editing by Muralikumar Anantharaman and Sherry Jacob-Phillips

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