Business / Corporate

Sharp trims full-year loss outlook due to cost cuts, display profits

Bloomberg

Sharp Corp. narrowed its full-year loss outlook after posting its first quarterly profit in more than two years, lifted by cost reductions and a turnaround in the display business.

The net loss will reach ¥37.2 billion ($329 million) in the year ending March 31, the Osaka-based company reported Friday. That’s considerably less than the ¥53 billion projected, on average, by analysts and the company’s previous forecast for a ¥41.8 billion shortfall.

Sharp’s shares have more than tripled in value since August, when Taiwan’s Foxconn Technology Group bought control of the struggling Japanese electronics-maker.

Tai Jeng-wu, who took over as president in August, is making headway in overhauling Sharp’s liquid-crystal display business, which reported an ¥11 billion profit in the latest quarter. He will next need to address losses in Sharp’s solar-panel operations and reverse a decline in consumer electronics sales.

“The display business has been on the mend, but the question of whether improvement is sustainable still remains,” said Masahiko Ishino, an analyst at Tokai Tokyo Securities. “The company needs to get these core operations in order before contending with the issues in other divisions.”

Sharp raised its full year revenue outlook 2.5 percent to ¥2.05 trillion and increased operating income forecast 45 percent to ¥37.3 billion. The company cited restructuring efforts for the revised outlook, saying cost reductions added ¥62.2 billion to the bottom line in the third quarter.

“Except for the solar business, all of our operations are profitable,” Executive Vice President Katsuaki Nomura said in a briefing in Tokyo on Friday. “Decision-making has sped up under new management and so has the pace of balance sheet improvement.”

Net income was ¥4.2 billion in the three months ended Dec. 31, topping the ¥3.7 billion average of analysts’ compiled by Bloomberg.

Operating income was ¥18.8 billion in the quarter, compared with the prediction for ¥13.2 billion.

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