Sharp Corp. said Tuesday its group net profit in the April to June period rose 32.6 percent from a year earlier to ¥19.20 billion ($172 million) as cost-cutting efforts paid off in its display business.
Group operating profit in the first quarter of fiscal 2018 surged 45 percent to ¥24.80 billion on sales of ¥533.86 billion, up 5.4 percent.
The strong earnings came as the Osaka-based electronics firm benefited from its restructuring efforts since it came under the wing of Taiwanese parent Hon Hai Precision Industry Co. in 2016.
Its cost-cutting measures as well as a sales increase helped offset a decline in product prices.
By segment, the LCD and television sector posted an operating profit of ¥10.5 billion, up 55.6 percent from a year earlier, while the smart home sector, which covers mobile phones and other home appliances, saw an operating profit of ¥11.8 billion, up 19.9 percent.
The company left unchanged its earnings projection for the year ending next March. It expects its consolidated net profit to rise 13.9 percent to ¥80 billion, and operating profit to grow 22.1 percent to ¥110 billion on sales of ¥2.89 trillion, up 19.1 percent.
Meanwhile, Sharp said it plans to use its cash reserves to purchase preferred stock worth about ¥200 billion after it scrapped a plan in June to conduct a public stock offering.
It aims to purchase preferred shares from financial institutions in two phases by next June.
At a news conference in Tokyo, Sharp Executive Vice President Katsuaki Nomura said: “We’re in talks with banks so we can acquire (the shares) under a condition as good as when we were planning a public stock offering.”
Sharp said its capital ratio, an indicator of financial health, eclipsed the 20 percent mark for the first time in six years, three months after restructuring to recover from years of financial hardship stemming from its volatile LCD business.
In the year that ended in March 2016, Sharp fell into negative net worth and was demoted from the Tokyo Stock Exchange’s first section to the second section in August the same year.
With its recovering business, Sharp returned to the bourse’s first section last December and posted its first group net profit in four years in the fiscal year ended this past March, helped by the solid LCD and television business.