Sharp to flip to small profit, spends $468m in mobile switch
updated 07:50 am EDT, Fri April 27, 2012
Sharp switch to mobile to take it profitable
Sharp in reporting its full-year results Friday both outlined a planned return to health and detailed the costs of a shift to mobile technology. It posted a steep loss equivalent to nearly $4.7 billion for its fiscal year, which ended with a $1.4 billion loss for its March quarter, but planned for its current fiscal year to get a slight profit of $248.2 million. Most of that would come from its partial change to mobile, as it expected TV sales to drop 19 percent even as the overall LCD business grew 29 percent.
The profits would be somewhat dampened by needed restructuring expenses. Its production of advanced IGZO displays by itself would incur a $468m cost to maintain idle facilities during the switch. Sharp saw itself having a total of almost $1.5 billion in costs, such as writing down unsold stock as it more vertically integrated the large-size LCDs it uses for TVs as well as paid for reorganizing non-Japanese branches.
Along with moving its secondary Kameyama plant more towards smartphones and tablets, Sharp has lately been offloading some of its TV costs, including a partial Foxconn stake in its main factory in Sakai. The swap has reflected tougher competition from TVs in Korea and other countries as well as a TV market that's heavily saturated next to the still rapidly growing cellphone and tablet fields.
Some of the mobile push may be fueled by Apple. Sharp is thought to be a new supplier for iPad LCDs. Its IGZO technology could also be vital for future iPads and iPhones, as it could allow the super-dense resolutions Apple wants while reducing the amount of backlighting, and thus power, needed to get a properly bright display. [via Reuters]
