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Sharp now seen falling into the red

OSAKA -- Sharp is expected to report a net loss that could reach several dozen billion yen for the current fiscal year ending March 31, instead of the 30 billion yen ($260 million) profit that up until now had been projected, as it struggles with intense price competition in its major product lines and books extraordinary losses.

     The Osaka-based company's sales are likely to fall below the 2.9 trillion yen that had been forecast, while operating profit is seen dropping about 50% from the previous fiscal year to around 50 billion yen, half of what had been expected.

     The weakness of the yen against the dollar is eroding margins on imported items such as white goods and solar panels that are produced abroad, and the electronic parts business is also seen falling into the red.

     Small-and-midsize-LCD operations were strong last fiscal year, yielding a profit of 11.5 billion yen, but intensifying price competition is quickly eroding earnings in that segment.

     The consumer electronics manufacturer will rework its business plan that had targeted a net profit of 80 billion yen for next fiscal year. In order to gain the cooperation of financial institutions such as its lending banks, the company will be pressed to engage in drastic restructuring that includes withdrawing from unprofitable segments and nurturing the development of new businesses. Sharp is planning to roll out the plan this spring.

(Nikkei)

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