Sharp Forecasts Operating Profit to Rise on Solar, LCD Panels

Sharp Corp., Japan’s largest maker of liquid-crystal displays, said operating profit may rise 23 percent this year as the company boosts earnings from LCD and solar panels.

Operating profit may increase to 97 billion yen ($1.2 billion) in the year ending March 31 from 78.9 billion yen a year earlier, the Osaka-based company said in a statement today. That compares with the 54.3 billion yen average of eight analyst estimates compiled by Bloomberg.

Sharp expects profit from its LCD business will gain 87 percent to 32 billion yen as growing demand for smaller panels used in mobile devices makes up for slower sales of large-sized panels, the company said today. Profit from solar panels may almost quadruple to 8 billion yen because of increasing demand in Japan, Sharp said.

Revenue may rise 0.9 percent to 3.05 trillion yen in the 12 months started April 1 from 3.02 trillion yen a year earlier, the company said in today’s statement.

Sharp is transforming its second-largest television panel factory in Kameyama, central Japan, to produce small- and medium-sized displays by the end of this year to tap growing demand for mobile devices, it said in April. The company resumed operations at its two biggest LCD factories in Japan on May 16 after suspending them due to a shortage of materials stemming from the March 11 earthquake.

One-Time Charge

Sharp may take a one-time charge of 12 billion yen in the fiscal first half to reorganize its LCD business and another 3 billion yen in the second half, President Mikio Katayama told reporters in Tokyo today. Full-year net income may fall 69 percent to 6 billion yen, the company said in today’s statement.

Sales of solar panels may rise to 1,700 megawatts from 1,242 megawatts last fiscal year, Sharp said. LCD sales may be little changed at 1.02 trillion yen, while deliveries of televisions may increase to 15 million sets from 14.8 million, the company said.

Sales of mobile phones are expected to drop to 9.6 million units from 9.7 million, Sharp said in the statement.

Industrywide revenue from LCDs used as TV monitors tumbled 22 percent in the quarter ended March 31 from a year earlier, with unit shipments declining 2 percent, researcher DisplaySearch said last month. Oversupply of large-area LCDs has continued for more than 12 months, the researcher said.

Sharp is aiming to benefit from smaller monitors. Shipments of 9-inch and smaller displays jumped 23 percent last year to 1.89 billion, helped by demand for smartphones and digital cameras, DisplaySearch said last month. Sharp ranked No.2 with 13.6 percent revenue share among makers of those devices, trailing Samsung Mobile Display Co., the researcher said.

Separately, the Nikkei reported Sharp is in talks to form an LCD parts venture with Taiwan’s Hon Hai Precision Industry Co., which may be set up as early as this year. Sharp’s Katayama declined to comment on the report.

Sharp rose 0.1 percent to 738 yen as of the 3 p.m. close of trading in Tokyo, after the forecast was announced.

To contact the reporter on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

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