August 2, 2012 / 6:15 AM / 7 years ago

Sharp posts first-quarter earnings loss, slashes annual forecast

A man looks at Sharp Corp's Aquos TVs displayed at an electronics store in Tokyo August 2, 2012. REUTERS/Yuriko Nakao

TOKYO (Reuters) - Sharp Corp, which posted its worst net loss in a century in the last financial year, reported a first-quarter loss as waning TV demand and an overcapacity at its main liquid crystal display plant continued to weigh on earnings.

In the three months to June 30, Sharp swung to an operating loss of 94.1 billion yen ($1.20 billion) from a 3.5 billion-yen profit a year earlier. That was deeper than the average 44.4 billion-yen loss estimated by five analysts surveyed by Thomson Reuters I/B/E/S.

The manufacturer of Aquos TVs also slashed its forecast to a full-year operating loss of 100 billion yen, from its earlier estimate for an operating profit of 20 billion yen. That compares with the average estimate for an operating loss of 18.2 billion yen in a poll of 16 analysts surveyed by Thomson Reuters since the company released its full year results in May.

Sharp is considering its first major layoffs that a source familiar with the matter told Reuters could be as many as 5,000 people.

The company in March also agreed to sell a 46.48 stake in its Sakai LCD plant to Taiwan’s Hon Hai Precision Industries, part of the Foxconn Group, in a bid to isolate itself from the losses at the facility in western Japan.

Hon Hai, a major supplier to Apple Inc, is purchasing new shares in Sharp worth 66.9 billion yen, giving it an 11 percent stake in Japan’s last major fabricator of LCD panels for TVs. ($1 = 78.2400 Japanese yen)

Reporting by Tim Kelly; Editing by Ryan Woo

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