Sharp Corp. said Tuesday it expects to post its first operating profit in three years in the current business year through next March, helped by restructuring efforts under the ownership of Taiwan’s Hon Hai Precision Industry Co.
Consolidated operating profit is expected to recover to ¥25.70 billion, a turnaround from a ¥161.97 billion operating loss in fiscal 2015.
The upbeat outlook comes as Sharp has been taking a series of restructuring steps under Hon Hai, which completed the takeover of the Japanese electronics maker in August.
Still, Sharp expects to be in the red on a net basis for the third straight business year with a loss of ¥41.80 billion, after reporting a massive ¥255.97 billion loss the year before. Sales are projected to fall 18.8 percent to ¥2 trillion.
For the six months through Sept. 30, Sharp reported a group net loss of ¥45.42 billion, much smaller than an ¥83.61 billion loss a year ago, as sales of liquid crystal displays continued to be sluggish.
The company eked out an operating profit of ¥79 million in the first half, compared with ¥25.16 billion in operating loss a year earlier. Sales dropped 28.1 percent to ¥919.69 billion in the first half.
The Osaka-based company aims to return to profitability on a net basis in fiscal 2017, with an eye to making a comeback to the main section of the Tokyo Stock Exchange from its second section.
Turning around the faltering liquid crystal display business remains a challenge for Sharp after massive losses prompted it to seek a partner and slash its workforce.
Sharp’s display device segment posted a 36 percent year-on-year drop in sales to ¥357.5 billion, taking a hit from slumping demand for displays for televisions and smartphones.
Sharp has said it plans to invest in next-generation organic light-emitting diode displays at a time of fierce competition with foreign rivals, now that it works with Hon Hai, an Apple Inc. supplier also known by its trade name Foxconn.
OLED displays are more energy-efficient and brighter than LCDs and could be used in high-end smartphones and other devices.
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