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Japan's Sharp swings to first-half profit on screen sales
[TOKYO] Japan's Sharp said Friday it swung to a first-half profit as it upgraded its full-year outlook, crediting strong LCD screen sales and cost cuts under a new Taiwanese owner.
The electronics giant booked a net profit of 34.7 billion yen (S$415.79 million) for the April-September period, reversing a 45.4 billion yen net loss a year ago, while sales jumped about 21 per cent to 1.12 trillion yen.
For the fiscal year to March, Osaka-based Sharp now expects a net profit of 69 billion yen, up from a previous forecast of 59 billion yen.
The recovery was mainly due to brisk sales of small- and mid-sized liquid crystal display (LCD) panels and of LCD television sets, as well as cost-cutting, the company said.
"Sales of small- and mid-sized LCD panels and of LCD televisions surpassed our previous forecasts, thus operating, current, and net profits all surpassed the previous forecasts significantly," it said.
The results mark a big improvement for the Aquos-brand maker, which had been pummelled by huge losses and mounting debts.
Sharp was formally acquired in August last year by Taiwan's Hon Hai, better known as Foxconn, which took a 66 per cent stake in the hard-hit firm for US$3.7 billion.
It was the first foreign acquisition of a major Japanese electronics company and marked a watershed for the once-mighty home electronics sector, which nurtured global brands including Sony and Panasonic but has struggled in the face of foreign competition.
Over the past decade Sharp bet heavily on LCDs, boasting the most advanced technology in the world.
But that turned into a weakness when the market became more competitive after the 2008 global financial crisis and lower-cost rivals dug into its profits.
While the firm still produces cutting-edge LCD screens, it has lacked the huge research and development funds necessary to keep ahead of the competition.