Sharp Corp., Japan’s biggest maker of liquid-crystal displays, fell the most in two weeks in Tokyo trading after the Nikkei newspaper said the company may post a 400 billion-yen ($5 billion) loss for the first half.
The shares dropped as much as 6.6 percent to 156 yen, headed for the biggest decline since Oct. 9, and traded at 159 yen as of 9:54 a.m. Sharp said Aug. 2 it may post a 210 billion-yen net loss for the six months ended Sept. 30.
Sharp is cutting jobs and selling factories, and has turned to lenders to refinance debt as it heads for a second straight year of losses amid slumping demand for TVs and a strong yen that’s eroding overseas earnings. The company may take 200 billion yen in charges for losses on LCD panels and other inventory, a writedown of deferred tax assets and restructuring costs, the Nikkei said, without citing anyone.
“A net loss that big may raise concerns about the company’s cash position,” Hideki Yasuda, an analyst at Ace Securities Co. in Tokyo, said of the report. “We may have to watch out for how much cash is left at the company at the end of the first half, and whether bridge loans from banks will be enough to refinance commercial papers.”
Sharp will probably revise its earnings forecasts for the year ending March 31, the Nikkei said. The company’s sales and operating loss for the first half may be in line with current company forecasts, the report said.
Atsushi Yoshida, a spokesman for Sharp, said the company isn’t the source of report. The Osaka-based company is scheduled to report earnings on Nov. 1.
The average of four analyst estimates compiled by Bloomberg is for a 215 billion-yen first-half net loss.
Sharp is cutting more than 10,000 jobs and selling overseas plants as well as U.S. solar developer Recurrent Energy LLC in an attempt to return to profit next fiscal year, people with knowledge of the plans said Sept. 26. The company presented a revival package to lenders that included asset sales and job cuts as it sought 360 billion yen in loans, the people said.
The maker of Aquos TVs turned to lenders for support as it struggled to refinance debt after Standard & Poor’s and Moody’s Investors Service cut its credit ratings to junk.
The company had 706 billion yen of short-term debt maturing within 12 months, according to its latest quarterly financial statement. Sharp’s cash and near-cash stood at 218 billion yen at the time.
The electronics maker has been renegotiating terms for a proposed stake sale to Taipei-based Foxconn Technology Group after widening its full-year loss forecast eightfold in August, triggering a slide in its share price. Foxconn agreed in March to invest 67 billion yen for a 9.9 percent stake in Sharp at 550 yen a share.
Sharp aims to return to profit next fiscal year with the help of job cuts and cost reductions, President Takashi Okuda said Sept. 14. The company is planning to reduce wages, managers’ salaries and bonuses to lower costs by 14 billion yen, it said earlier this month.