March 14 (Bloomberg) -- Sharp Corp. named Takashi Okuda its new president after forecasting a record annual loss amid slumping prices for its Aquos TVs, an economic slowdown and a tax charge.
Okuda, 58, now an executive officer, will replace Mikio Katayama effective April 1, the Osaka, Japan-based company said in a statement today. Katayama, 54, will become chairman and Katsuhiko Machida, who holds that post now, will be an adviser.
Sharp, Japan’s largest maker of liquid-crystal-display panels, follows Sony Corp. and Panasonic Corp. in replacing leaders after falling TV prices and a strong yen led them to forecast worsening earnings. Sharp expects a 290 billion-yen ($3.5 billion) net loss in the year ending March 31, it said Feb. 1, reversing an earlier prediction for a 6 billion-yen profit.
“The big challenge for Sharp remains the same even with the management change,” said Masamitsu Ohki, a fund manager at Stats Investment Management Co., a Tokyo-based hedge fund. “There is a doubt whether the LCD market will recover.”
The electronics maker, founded in 1912, plans to halve output at its largest TV panel factory in Sakai, Japan. In April, Sharp said it suspended production at its two biggest LCD plants.
Sharp rose 4.3 percent to 531 yen at the close of Tokyo trading, paring earlier losses, after saying it planned to announce management changes. The stock has declined 21 percent this year, compared with an 18 percent increase in the Topix Index, Japan’s broadest equities gauge.
Rating & Investment Information Inc. cut Sharp’s credit rating by two levels to A-, the fourth-lowest investment grade, from A+ because “it will likely take time for the company to improve earnings capacity,” the Tokyo-based ratings company said earlier this month.
Okuda heads Sharp’s overseas business and previously oversaw the LCD-TV business, according to the company’s website. He joined Sharp in 1978, according to data compiled by Bloomberg.
The company wants to unveil a business plan by the time it announces full-year earnings, Okuda said at a press conference in Osaka. Katayama also apologized to shareholders for the record loss.
“I will basically follow in Katayama’s footsteps,” Okuda said. “We’ll do our best to rebuild Sharp to live up to expectations.”
Sharp last month widened its operating-loss estimate for the solar-cell business by 50 percent to 24 billion yen for this fiscal year because of weak demand, stronger competition and price declines. The business contributes to 7.8 percent of its sales.
Company shares declined 5.1 percent earlier today after an analyst with iSuppli said Samsung Electronics Co. will provide the screen for Apple Inc.’s new iPad after LG Display Co. and Sharp didn’t meet the U.S. company’s quality requirements.
Sharp and LG Display may start shipping panels for the new iPad in April, according to Vinita Jakhanwal, a senior manager at iSuppli, a unit of Englewood, Colorado-based IHS Inc. The new tablet goes on sale March 16.
“The top management change won’t fix Sharp’s problems,” said Mitsushige Akino, who oversees about $600 million at Ichiyoshi Investment Management Co. in Tokyo. “The change is more from the aspect of taking responsibility for the worst loss, rather than a forward-looking move.”
Japan’s biggest makers of TVs, phones and chips announced leadership changes after saying they’ll lose about $17 billion this year. Osaka-based Panasonic named Kazuhiro Tsuga, 55, to succeed President Fumio Ohtsubo, 66, the company said Feb. 28.
Tokyo-based Sony named Kazuo Hirai, 51, to replace President and Chief Executive Officer Howard Stringer, 70, the company said Feb. 1.
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