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Sharp drops to record low after saying it will miss profit goal
[TOKYO] Sharp Corp shares fell to a record low in Tokyo trading on Friday (Sept 25) after the struggling electronics maker said it will miss its operating profit forecast for the first half.
The shares slumped as much as 10 per cent to 139 yen, the lowest since listing in 1974, as of 9:41 am in Tokyo. The supplier of displays to Apple Inc. expects to fall short of its outlook for 10 billion yen (S$118.25 million) in operating income when it reports earnings for the six months ending Sept 30, it said in a statement.
On Friday, Sharp also said it had no plans to change its full-year outlook "at this time." The shares fell Thursday as well, dropping 5.5 per cent, as a person familiar with the matter said Sharp expected to miss its first-half profit target and may cut its full-year forecast.
Sharp is considering selling a stake in the LCD operation to Foxconn Technology Group unitÂ Hon Hai Precision Industry Co or to Japan Display Inc. owner Innovation Network Japan Corp, people with knowledge of discussions within the companies have said. The declining outlook for earnings at Sharp this year has added urgency to the talks and increased the odds of a deal with Hon Hai,Â the person said. The Taiwan-based company would not face the antitrust hurdle Japan Display would have to clear as a rival supplier of LCDs to Apple.
Sharp will report a 30 billion yen operating loss for the six months ending Sept 30, the Nikkei newspaper reported Friday, without saying where it got the information.
The shares have slumped 45 per cent this year, compared with a 2.6 per cent gain for the Topix index.
Sharp President Kozo Takahashi 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 had initially sought an investment from Taiwan- based Hon Hai in 2012. Those talks foundered over disagreements on price and Hon Hai's possible role.