Bloomberg News

Sharp Shares Fall on Wider-Than-Estimated Loss Forecast

May 01, 2012

Sharp has lost 29 percent of its market value so far this year. Photographer: Kiyoshi Ota/Bloomberg

Sharp has lost 29 percent of its market value so far this year. Photographer: Kiyoshi Ota/Bloomberg

Sharp Corp. (6753), Japan’s largest maker of liquid-crystal displays, fell to the lowest in 33 years in Tokyo trading after forecasting a wider-than-expected full-year net loss amid slow demand for televisions.

The shares dropped 9.3 percent to close at 468 yen, the stock’s lowest since Aug. 21, 1979. Japan’s benchmark Nikkei 225 Stock Average fell 1.8 percent. The maker of Aquos televisions said April 27 it will probably post a 30 billion yen ($376 million) net loss for the year started April 1, compared with the 7.6 billion-yen average loss forecast of 23 analyst estimates compiled by Bloomberg.

Sharp’s LCD and solar-panel businesses will each lose about 10 billion yen this fiscal year, while the audio-visual and communication equipment unit may lose about 5 billion yen, the company said last week. The Osaka-based manufacturer, which has halved output at its largest TV panel factory in Sakai, Japan, expects TV demand to recover in the fiscal second half, according to Executive Managing Officer Tetsuo Onishi.

“You can hardly say Sharp has a drastic plan” to improve its results, Shiro Mikoshiba, an analyst at Nomura Holdings Inc. in Tokyo, said in an April 30 report. The outlook for the company’s TV, large-panel and solar-panel businesses “remain very uncertain,” he said, cutting his share-price estimate on Sharp to 494 yen from 516 yen.

‘Optimistic’ projection

Japan’s stock exchanges were closed yesterday for a national holiday. Sharp has lost 30 percent of its market value so far this year.

Operating profit, or sales minus the cost of goods sold and administrative expenses, will probably be 20 billion yen in the year started April 1, compared with an operating loss of 37.6 billion yen last year, Sharp said. Revenue is expected to gain 10 percent to 2.7 trillion yen.

The operating profit estimate “looks optimistic,” given a worsened business environment for TVs, mobile phones and large LCD panels, Masahiro Ono, an analyst at Morgan Stanley MUFG Securities Co., said in an April 28 report.

Sharp’s large-panel business is expected to post a loss this fiscal year, while its small and mid-sized panel operations should be profitable, Onishi said April 27.

To contact the reporter on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net


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