Sharp's "Tough Spot": Loss Doubles, Q3 Up
By Oonagh Reidy | Monday | 04/02/2013
Sharp's double loss: Second Japanese TV maker in a week to report major losses, dropping sales as LCD demand falls "drastically"
Struggling giant Sharp has announced a net loss of 424,347 bn yen (A$4.39bn) for the nine month period to December 31 - double the figure a year ago, citing restructuring charges.
Sharp, who makes screens for Pads, said total sales fell 6.4% to 1,782,455 bn yen during the nine months.
Fellow Japanese giant, Panasonic, said its net loss doubled to A$6.4Bn, on Friday, also citing a slump in TV demand.
Read: Panasonic Loss Doubles $6.4Bn, TVs Slump
The "severe" Japanese economy and depressed private consumption, while slowdown in the growth of China and the European financial crisis were also blamed on Sharp's earnings downfall.
However, third quarter net sales rose 15% to 678.2 billion yen, and Sharp also recorded an operating profit of 2.6 billion yen - up 27.1 bn yen.
However, it still failed to turn a profit despite rising sales. Q3 Net loss was 36.7 billion yen, down from -173.6 bn yen, which the company said was "a steady improvement" year-on-year.
Comparing Sharp's reinvention to a mountain climb, President Takashi Okuda said: "We are still in a tough spot financially and earnings-wise, so we're going to accelerate our structural reforms without easing up."
"I'd say we're still not even at the base."
It is still negotiating a deal with Hon Hai, Apple's largest third party supplier, who had previously agreed to invest in the struggling company but pulled out, and other companies as it seeks life saving capital injections to stay afloat.
Sales in its 'Audio-Visual and Communication Equipment' division fell 36% to 540.3 bn yen, LCD TVs fell "drastically" due mainly to sluggish demand in Japan and also in China due to worsening Japan-China relations.
However, Sharp TVs enjoyed healthy sales in ASEAN and other emerging countries.
Mobile phone sales also declined, due mainly to "severe competition and supply shortages of key components." And like Panasonic, sales in appliance and non-consumer electronic categories rose.
Sharp reported a rise in sales of air conditioners and washing machines, and its appliance business was up 4.3%, overall.
|Sales of Information Equipment, which includes Sharp displays were 208.5 billion yen, up 3.1%. |
Sharp's Electronic Components division sales also rose 28% to 803.7 billion yen, on the back of a 40% jump in sales of LCD screens for smartphones, and large-size LCDs, LEDs and in camera modules for mobile and tablet terminals.
Sharp says it's making major efforts to turn around its struggling business with the mass-production of IGZO LCD screens for smartphones, launching smartphones with LCDs, and enhancing sales of Black Solar high-efficiency solar cells.
The company also says it has made improvements in financial strength, including reductions in inventories and noncurrent assets, slashed labour costs and its workforce by around 10%.
Sharp is forecasting a slight rise in full year sales to 0.02%, although is still forecasting an operating loss of -155 bn yen, net loss of -450 bn yen for FY 31 March 2013.
Apr/May 2011 issue
reviews the hot new iPhone attach device, the Zeppelin Air. And we look at what's going on in the tablet space...