Tokyo - Sharp fell to a record low in Tokyo trading after lowering its operating profit forecast on slumping demand for smartphone displays in China.
The struggling liquid crystal display maker also said it won’t forecast net income until the results of reforms at the are clearer.
Operating income will be 10 billion yen ($83 million) for the year ending March 2016, compared with a previous projection of 80 billion yen, the company said in a statement on Monday. The net loss for the six months ended in September was 84 billion yen, compared with the 66 billion yen average of analyst estimates compiled by Bloomberg.
Sharp has posted net losses in three of the past four years as demand for LCD televisions and displays slumped and lower- cost competitors in South Korea and China increased their market share at the Osaka-based company’s expense. The TV, electronics and appliances maker is considering selling a stake in its LCD operation to Foxconn Technology Group unit Hon Hai Precision Industry Company or to Japan Display owner Innovation Network Japan, people with knowledge of discussions within the companies have said.
“Sharp needs to improve its performance in the second half to meet the 10 billion yen operating profit target,” Kazunori Ito, an analyst at Barclays in Tokyo said by phone. “Additional restructuring is a road Sharp must go down.”
Sharp’s stock fell 2.2 percent to 134 yen at 9.03am in Tokyo trading, the lowest since 1974. The shares have dropped 50 percent this year.
The company reported an operating loss of 26 billion yen for the first half on a preliminary basis Monday, compared with a forecast for 10 billion yen in operating income and a 29.2 billion yen profit in the period a year earlier.
Sharp is struggling under rising debt and has announced plans to sell the company’s headquarters, withdraw from the TV business in North America and cut back in solar panel manufacturing.
The company reported first-half results Monday on a preliminary basis. It is scheduled to post final figures on October 30.
BLOOMBERG