Tokyo Japanese electronics giant Sharp said Tuesday it would report a record full-year loss of $4.7 billion, as the firm struggles to turn around its sagging liquid crystal display (LCD) television business.
The company, which will report its results later this month, said it was now expecting a shortfall of 380 billion yen for the year to March, up from an earlier forecasted loss of 290 billion yen.
“We have adjusted our consolidated earnings forecasts in connection with delayed shipments of LCDs used for mobile devices” and restructuring costs, Sharp said in a statement.
The announcement came hours after Sony reported a widening loss forecast, with the maker of PlayStation consoles and Bravia televisions saying it would lose an eye-watering 520 billion yen in the fiscal year just ended in March.
Japan’s electronics giants have suffered in recent years as rampant competition from foreign rivals has sent prices tumbling, together with the effects of a strengthening yen and a stuttering global economy, as AFP stated.
Last month, Sharp announced a deal with Taiwan’s Hon Hai Precision as part of an LCD panel tie-up as it looks to save a balance sheet covered in red ink.
Under the deal, Sharp will sell 121 million new shares worth 66.9 billion yen to Hon Hai, giving the Taiwanese company a 10 per cent stake and making them the largest shareholder.
Hon Hai, which makes gadgets for Apple, will also take half of Sharp’s 93.0 per cent interest in a huge LCD plant in Sakai, western Japan, paying 66 billion yen.
Sharp also last month said it would replace its top executive, with the firm’s Executive Managing Officer Takashi Okuda taking over for Mikio Katayama as president, to “change its management structure”.
The announcement made Sharp the latest Japanese electronics maker to announce changes in top management after Panasonic and Sony reshuffled their executive line-up.
Sharp’s forecast in February that it would lose 290 billion yen for the year to March reversed an earlier projection of a 6.0 billion yen net profit, as it blamed falling prices, a high yen and the global economic slowdown for the poor results.
Standard & Poor’s downgraded Sharp’s credit rating following that forecast.