- Forecast for 10 billion yen annual operating profit maintained
- Company considering rival rescue plans from Foxconn, INCJ
Sharp Corp. reported its fifth straight loss as the embattled maker of Aquos flat-screen televisions decides between two competing bailout offers.
Sharp had a net loss of 24.7 billion yen ($209 million) in the three months to Dec. 31, the Osaka-based company reported on Thursday. That compares with analyst estimates for a loss of 8 billion yen.
The board is considering rival bids from state-backed Innovation Network Corp. of Japan and Taiwan’s Foxconn Technology Group with the company planning to select a partner in around a month. Sharp plans to give preference to Foxconn, NHK reported earlier without citing anyone.
“Both options have a good chance of turning Sharp around, but it’s very difficult to compare the two at this point,” Toshihiro Uomoto, the chief credit strategist in Tokyo at Nomura Holdings Inc., said prior to the announcement. “Foxconn’s acquisition is likely to come with all kinds of conditions. INCJ’s deal will also entail some restructuring.”
Sharp had an operating loss of 29 billion yen in the nine months ended December. The company maintained its forecast for full-year operating income of 10 billion yen on sales of 2.7 trillion yen.
Foxconn’s Terry Gou visited Tokyo last week and met with Mizuho Financial Group Inc. and Mitsubishi UFJ Financial Group Inc., as well as government officials, according to a person familiar with the talks. Foxconn’s offer includes buying 200 billion yen of Sharp’s preferred stock owned by the banks, the person said.
INCJ has offered to invest about 300 billion yen, splitting the funds between Sharp’s LCD panel business and remaining operations, a person familiar with the talks said last month. The possibility of a government bailout first surfaced in 2012, when Sharp teetered on the brink of bankruptcy after its Aquos TVs lost market share to those from Samsung Electronics Co., LG Electronics Inc. and lower-cost Chinese rivals.