Sharp forecasts doubling of full-year loss

2 Nov

Sharp, the struggling Japanese TV maker, has warned it might not be able to survive on its own after forecasting that its full-year loss would double to $5.6bn.

“Our corporate group has booked massive second-quarter net and operating losses … and now see a serious negative operating cash flow,” it said. “This raises serious doubts about [our ability] to continue as a going concern.” It added that it was considering alliances with other companies.

Sharp’s larger Japanese rival Sony made only a small operating profit between July and September, and the firm said it expected to sell fewer of its hand-held PSP and Vita consoles this year than it previously estimated. It also cut its sales forecast for televisions and compact digital cameras.

The poor news from Sony and Sharp follows that of rival Panasonic, which said on Wednesday that it would lose almost $10bn this year. The company said it was writing down billions of dollars of goodwill and assets in its mobile and energy units and preparing for more restructuring that would probably see it shift its focus from money-losing TVs and other consumer electronics.

Panasonic, which has shed about 36,000 jobs, also skipped its dividend for the first time in more than 60 years and cut its full-year TV sales forecast by more than a quarter. Its shares slumped by nearly a fifth, wiping $3bn off its market value.

“Consumer needs have been changing and for too long Japanese electronics firms, like Sharp, with their size and heavy reliance on past successes, have been too slow to adapt,” said Yuuki Sakurai, chief executive of Fukoku Capital Management.

Sharp has been in talks for months with Taiwanese firm Hon Hai about becoming the Japanese company’s biggest shareholder. Sharp said talks were continuing and it expected a deal before a March deadline.

“I don’t think Sharp has a viable business in the next three to five years,” said Tetsuro Ii, chief executive of Commons Asset Management in Tokyo. Sharp has secured further loans from banks in return for a pledge to cut 10,000 jobs, sell assets including overseas TV assembly plants, and return to profit. It has also mortgaged most of its offices and factories in Japan, including one that makes displays for Apple’s iPhone and iPad.

http://www.businessownersdirect.com/sales/

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: