Sharp Corp. said Friday it remained in the red in the April-June period for the fifth straight year with a net loss of ¥33.98 billion due to sluggish sales of liquid crystal displays for smartphones.
The Osaka-based electronics maker quickly announced additional restructuring steps, saying it will stop producing and selling TVs in North and South America and will sell its Mexican production unit to China’s Hisense Group.
The result was far worse than its group net loss of ¥1.79 billion in the same quarter last year.
Sharp posted a group operating loss of ¥28.76 billion, compared with a profit ¥4.67 billion profit a year earlier, on consolidated sales of ¥618.30 billion, down 0.2 percent.
Sales of its display device business, including LCDs for smartphones, plunged 9.2 percent due to slower growth of and intensified competition in the Chinese market, the company said.
Sales of LCD TVs slid 25.2 percent due partly to more severe competition in large-size models in North and South America as well as a downturn in the Chinese market. But sales increased in Japan, the maker of Aquos brand TV sets said.
Given the increasingly severe business environment in the display business, President Kozo Takahashi said Sharp will “explore various possibilities” in running that operation, including forming an alliance with other companies and spinning off the business.
“The situation became more severe compared to our projection in May” when the company announced a medium-term business plan through fiscal 2017, Takahashi said. He had earlier showed a negative stance about spinning off the operation.
But Sharp left unchanged its group earnings forecast for the full business year to March 31, as its business performance is “basically moving in line” with its expectation, Takahashi said.
The company projects a group operating profit of ¥80 billion, compared with a loss of ¥48.07 billion the previous year, on sales of ¥2.8 trillion, up 0.5 percent.
Sharp has yet to release its full-year group net profit outlook.
Sales of its energy solutions business including solar power dropped 46.6 percent in the April-June quarter from a year earlier due to declining sales in Japan and the sale of its U.S. subsidiary in March.
By contrast, sales of devices for smartphone cameras more than doubled, Sharp said.
Reeling from the poor performance of its core LCD business, Sharp has taken steps to cut costs, including seeking the voluntary retirement of 3,500 employees, slashing employee salaries and bonuses for employees and putting its headquarters up for sale.
“Our company is still in a severe management condition,” Takahashi told a news conference in Tokyo. “We will continue to accelerate restructuring efforts to realize the medium-term plan.”
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