Sharp Forecast to Move into the Black for the First Time in Three Years

4 Nov
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Sharp forecast to turn into the black for the first time in three years at the end of the 2016 fiscal year, according its earnings report on Nov. 1.

Sharp expected to post an operating profit of 25.7 billion yen (US$248.48 million) in March, the end of the 2016 fiscal year. Although the number is still lower than the 40 billion yen previously forecast by Nikkei, it will be Sharp’s first time of turning a profit in three years. The earnings report on Nov. 1 was also the first published earnings report since Taiwan’s Hon Hai acquired Sharp.

Sharp also published its earnings performance in the past six months and quarterly results. The company reported a consolidated sale of 496.2 billion yen in Q2, up 17.2 percent from Q1, while the consolidated operating profit reached 2.5 billion yen. Loss in Q2 was 17.9 billion yen, down from 27.4 billion yen in Q1.

Despite growth in the sale of camera modules in Q2, the drop in LCD panels and solar batteries pushed the consolidated sales down by 25 percent, when compared to the same period in 2015. As a result, the consolidated operating profit also decreased by 29 percent to reach 2.5 billion yen. However, as the company continues to restructure and optimize efficiency, it was able to reduce loss to 17.9 billion yen, down from 49.6 billion yen in the same period in 2015.

In terms of specific products, Sharp’s LCD panel division saw a 37 percent year-on-year drop in sales in Q2. The revenue was 190.3 billion yen, with a net loss of 7.8 billion yen. The loss was an improvement of 25 percent from 10.4 billion yen in Q2 2015. Revenue by the solar battery business also decreased by 27 percent to 30.4 billion yen. The division of camera modules saw a growth of 11 percent in revenue, posting 51 billion yen, with a net loss of 1.3 billion yen. The electronic component business was down 26 percent with a revenue of 51 billion yen.

Meanwhile, in the first six months of the 2016 fiscal year — April to September, the revenue was 919.69 billion yen. Although the six-month revenue was down 28.1 percent when compared to the same period in 2015, the operating profit improved to 79 million yen from a loss of 25.16 billion yen in the same time in 2015. Sharp also incurred a loss of 45.42 billion yen in the first six months of the 2016 fiscal year, down 45.7 percent from the same period in 2015.

In all, Sharp expected a consolidated revenue of 2 trillion yen in 2016, down 18 percent. The operating profit was predicted at 25.7 billion yen. Net loss for the whole year was forecast at 41.8 billion yen, a drop of 83.7 percent from a year earlier.

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