Business / Corporate

Sharp's vision for recovery blurred as it posts further losses

by Kazuaki Nagata

Staff Writer

Electronics-maker Sharp Corp.’s recovery seemed on the blink Friday as it posted a ¥25.1 billion operating loss and ¥83.6 billion net loss for the first half of fiscal 2015. The news came days after Sharp sharply reduced its expectations for the period ahead.

The Osaka-based firm reported ¥1.27 trillion in sales, down from ¥1.32 trillion for the same period last year.

Its net loss expanded to ¥83.6 billion, ¥35.3 billion of which comprised restructuring costs.

Earlier this week, Sharp revised down its full-year forecast. As recently as May it declared a three-year business plan would include an ¥80 billion operating profit this fiscal year. It has now amended that figure to ¥10 billion.

Sharp President Kozo Takahashi said the downward revision mainly had to do with tough competition in LCD panel sales in China.

In May, Sharp expected a ¥45 billion operating profit from its LCD panel business, but has now set the figure at a ¥30 billion operating loss.

“The downward trend is because of one factor. Other businesses are going well,” said Takahashi.

Sharp’s expectations of rising demand in China for high-end, high-resolution smartphone screens were not borne out, and prices are shrinking.

“Our prediction was completely wrong,” he said.

LCD panels are one of the firm’s core businesses and account for about a third of its total sales.

At a news conference in July, Takahashi said Sharp was thinking about various options for the LCD panel business, possibly partnering with others — or selling it entirely.

Takahashi admitted Wednesday that Sharp had been talking to several firms about the matter.

Sharp has been struggling amid tough competition and shrinking prices in its main markets, including LCD panels, TVs and solar cells.

It posted ¥376 billion, ¥545.3 billion and ¥222.3 billion net losses in fiscal 2011, 2012 and 2014.

Takahashi said he had responsibility for the three-year plan and intended to see it through. He said he did not plan to step down.