Tokyo: Sharp Corp forecast its first annual operating profit in three years, citing efforts to cut costs and add synergies after Taiwan’s Foxconn Technology Group bought control of the Japanese company in August.
Operating profit will reach 25.7 billion yen ($245 million, Dh899 million) in the 12 months ending March 2017, the Osaka-based company said in a statement on Tuesday. That compares with a 12.9 billion yen average of 10 analysts’ estimates compiled by Bloomberg. Sharp forecast sales for the fiscal year would reach 2 trillion yen, compared with analyst estimates of 2.11 trillion yen.
Sharp’s stock has doubled since early August when Foxconn completed its capital injection. While the 289 billion yen rescue package brought the Japanese company back from the brink of bankruptcy, Sharp now needs to prove it can revamp its liquid-crystal display business, stem losses in the solar panel operations and reverse a decline in consumer electronics sales. Tai Jeng Wu, who took over as Sharp’s president in August, was scheduled to deliver his first earnings report in Tokyo yesterday.
Sharp’s operating profit in the second quarter was 2.6 billion yen, according to a Bloomberg calculation based on first half results. That compares with analyst estimates of 10.6 billion yen.
The net loss for the fiscal year will probably narrow to 41.8 billion yen, Sharp forecast. Analysts expected an annual shortfall of 36.2 billion yen for the year ending March 2017. Thanks to Foxconn’s investments, Sharp’s liabilities no longer exceed assets, allowing the company to focus on improving its core business.
