Sharp expects operating loss due to reduction in display prices

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By Larry Banks

Today Japan’s Sharp Corporation said it expects an operating loss for the April to September period, mainly due to a reduction in prices for displays used by smartphones. The disappointing news comes after the company received a $1.7 billion bank bailout in May this year.

Sharp books operating loss

The electronics giant said it will announce an operating loss of around 26 billion yen ($215 million) when it reports first half earnings this Friday, instead of the 10 billion yen profit that was previously forecast in July this year.

The company has also reduced its full year operating profit forecast down from 80 billion yen to just 10 billion yen.

The latest forecasts are likely to increase the pressure on Sharp to seek a buyer for at least some of its display business. The ongoing restructuring was one of the main conditions in securing a prior 200 billion yen rescue package from Japanese banks in May, the second rescue plan in three years.

Sharp was one of the top display suppliers to Apple, but has lost out in the last few years to company’s such as LG Display from South Korea, and local rival Japan Display Inc.

Critics of the company have said Sharp has over-spent in manufacturing capacity in recent times, and has failed to innovate to offset falling profit margins.

Sharp’s shares closed at 137 yen on Monday, down 49 percent this year.

SOURCE: Reuters.

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