Sharp Trims Full-Year Loss Outlook on Cost Cuts, Display Profitsby
The company reports first quarterly net income in two years
Sharp’s display business returns to profit in third quarter
Sharp Corp. narrowed its full-year loss outlook after posting its first quarterly profit in more than two years, lifted by cost reductions and a turnaround in the display business.
The net loss will reach 37.2 billion yen ($329 million) in the year ending March 31, the Osaka-based company reported on Friday. That’s narrower than the 53 billion yen projected, on average, by analysts and the company’s previous forecast for a 41.8 billion yen shortfall.
Sharp’s shares have more than tripled in value since August, when Taiwan’s Foxconn Technology Group bought control of the struggling Japanese electronics maker. Tai Jeng Wu, who took over as Sharp’s president in August, is making headway in overhauling the liquid-crystal display business, which reported an 11 billion yen profit in the latest quarter. He will next need to address losses in Sharp’s solar-panel operations and reverse a decline in consumer electronics sales.
“The display business has been on the mend, but the question of whether improvement is sustainable still remains,” said Masahiko Ishino, an analyst at Tokai Tokyo Securities. “The company needs get these core operations in order before contending with the issues in other divisions.”
Sharp raised its full year revenue outlook 2.5 percent to 2.05 trillion yen and increased operating income forecast 45 percent to 37.3 billion yen. The company cited restructuring efforts for the revised outlook, saying cost reductions added 62.2 billion yen to the bottom line in third quarter.
“Except for the solar business, all of our operations are profitable,” Executive Vice President Katsuaki Nomura said in a briefing in Tokyo on Friday. “Decision making has sped up under new management and so has the pace of balance sheet improvement.”
Net income was 4.2 billion yen in the three months ended Dec. 31, topping the 3.7 billion yen average of analysts’ compiled by Bloomberg. Operating income was 18.8 billion yen in the quarter, compared with the prediction for 13.2 billion yen.