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Sharp said poised to miss interim forecast, cut 2016 target
[TOKYO] Sharp Corp will miss its first-half profit forecast and is poised to lower its target for the full year as rising competition among suppliers of liquid-crystal displays pushes down prices, a person familiar with the matter said. Its shares fell.
The supplier of displays to Apple Inc. expects to fall short of its 10 billion yen (S$118.2 million) outlook for operating income when it reports earnings for the six months ending Sept 30, the person said. The company may report an operating loss for the first half or break even, the person said.
Sharp is considering selling a stake in the LCD operation to 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 this year has added urgency to the talks and increased the odds of a deal with Hon Hai, 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 shares dropped as much as 4.9 per cent to 156 yen in Tokyo, the most on an intraday basis since May 18. The shares traded at 158 yen as of 2.26pm local time and have slumped 41 per cent this year, compared with a 2 percent 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 Foxconn Technology Group's Hon Hai in 2012, but talks foundered over disagreements on price and the Taipei-based company's possible role.
Sharp spokesman Yoshifumi Seki declined to comment on the company's earnings outlook.
A Foxconn spokesman said he couldn't immediately comment on the company's relationship with Sharp.