Sharp Corp. on Thursday announced a massive net loss for the third time in four years but vowed to turn around its fortunes within two.

The struggling Osaka-based electronics maker announced restructuring measures that will see it reduce its capital from around ¥120 billion to just ¥500 million to cover losses, and shed 3,500 jobs in Japan.

Sharp posted a ¥222 billion loss for fiscal 2014, which ended March 31, citing the burden of its lagging liquid crystal panel business and mounting restructuring costs.

The company forecast an ¥80 billion operating profit for this year but did not disclose a projection for net income.

Sharp has been in serious financial straits for the past four years. It posted a more than ¥900 billion net loss in fiscal 2011 and 2012 combined, necessitating drastic restructuring that allowed it to book a net income of ¥11 billion in fiscal 2013. But it has since slipped back heavily into the red.

On Thursday, Sharp unveiled a new midterm plan that includes reducing capital to clear accumulated losses and making five divisions more independent and accountable via the introduction of what it dubs a "company-inside-company" system. It will also shrink its TV businesses and hand layoff notices to 3,500 employees in Japan.

"By thoroughly implementing these restructuring measures, I think we will see a path to recovery," said President Kozo Takahashi.

Sharp also said that it will receive a ¥225 billion capital injection from Mizuho Bank, Bank of Tokyo-Mitsubishi UFJ and turnaround fund Japan Industrial Solutions to repay debts and make investments toward achieving its medium-term plan, which envisages a return to the black in fiscal 2016.

Sharp said it will act to create new profit-driving businesses, but the LCD business, which accounts for about one-third of its sales, is likely to continue to weigh heavily.

Industry observers expressed concern as to whether Sharp will ever be able to secure stable revenue and profit from LCD assembly.

The company has been focusing on producing small and midsize LCD panels for smartphones and tablets and hopes to differentiate itself by focusing on quality, particularly energy-efficiency and clarity.

Hiroshi Hayase, director at U.S.-based DisplaySearch's Japan branch, which conducts research on display-related industries, said Sharp indeed boasts enviable LCD technologies and high cost-competitiveness but faces the challenge of acquiring steady, large-scale orders.

Sharp's Kameyama No. 2 plant in Mie was originally built for producing TV panels but has since shifted to production of smartphone screens.

Hayase said Kameyama No. 2 is capable of efficiently producing large numbers of panels but it is not an ideal facility for completing small orders. Customers who need premium panels in large volumes are limited to companies like Apple and China's Xiaomi.

"The big question for Sharp is how to manage this display production line efficiently," said Hayase, referring to Kameyama No. 2.

One positive factor on Sharp's side is that while smartphones are conquering the world, many customers have low-spec models and will probably upgrade in the future, Hayase said.

Hidetaka Ishihara, a senior manager at Dream Incubator Inc., a Tokyo-based consulting firm, said Sharp will probably be better off for being less dependent on the LCD business.

Scale merit has become crucial for success in the LCD industry, making it critical for players to continually invest in equipment. But it is unlikely that Sharp will be able to maintain such a high level of investment by itself in the coming years, and this means it will have to team up with other firms, Ishihara said.

Sharp is good at identifying customers' needs and developing the technology and products to suit them, he said, pointing to its past prowess with calculators.

This is due to its innovative spirit. It recently developed LED light bulbs that double as air cleaners by incorporating its popular "plasmacluster" technology. It has also produced the Healsio Ocha Presso, a green-tea version of the espresso machine.

Although such products are targeted at niche markets and may never rival the LCD business in scale, Ishihara said their development probably offers healthier prospects for Sharp than maintaining its reliance on the LCD.