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 user 2005-11-07 at 10:23:00 am Views: 46
  • #14521

    Sharp posts H1 profit drop, keeps outlook
    - Japan’s Sharp Corp. said on Wednesday its operating profit fell a
    worse-than-expected 3 percent in the first half as sliding flash memory
    chip prices overshadowed strong demand for liquid crystal display TVs,
    but it stood by its full-year forecast for a 6 percent rise in profit.
    the world’s top maker of LCD televisions, Sharp has been in a prime
    position to benefit from the rapidly growing market for flat TVs. It
    has also enjoyed robust sales of solar panels and an uptick in demand
    for its copiers and high-tech ovens.
    But its earnings have been
    weighed down by tumbling prices of flash memory and image sensor chips,
    as well as intense competition in the market for small LCD panels used
    as displays in mobile phones and portable game players.
    “We are
    seeing an upward trend in our financial results since hitting a bottom
    in the latter half of last year,” Executive Vice President Hiroshi Saji
    told a news conference.
    The Osaka-based firm said group operating
    profit was 75.07 billion yen ($652.1 million) in the six months ended
    September, compared with a profit of 77.58 billion yen in the first
    half last year. Sales rose 6.2 percent to 1.34 trillion yen.
    The profit result was below the market consensus of 77.43 billion yen, according four analysts polled by Reuters Estimates.
    the first-half setback, Sharp’s earnings will stand out in Japan’s
    struggling consumer electronics sector. Unable to weather sliding
    product prices, rivals Sanyo Electric Co., Victor Co. of Japan Ltd. and
    Pioneer Corp. are all expecting big losses in the first half.
    said it raised output this month at its flagship LCD plant in western
    Japan to be able to process 51,000 sixth-generation glass substrates
    per month, up from 45,000 units a month in April, but it was still
    falling short of demand.
    “Demand for large LCD panels was very
    strong in the first half, and the situation is still tight today,”
    Sharp President Katsuhiko Machida told a press conference in Osaka. “We
    are considering ramping up output further but don’t think it will be in
    time for the second half.”


    said Sharp expected prices for LCD TVs of 32 inches and smaller to be
    relatively stable, but expected a further price drop for models larger
    than 40 inches. He said prices overall fell about 20 percent in the
    first half.
    Sharp reiterated its forecast for sales of 4 million LCD
    TVs and for operating profit to reach 160 billion yen this business
    year, up 6 percent from 2004/05.
    Machida sounded an upbeat note
    about its small and midsized panels, saying profit margins on those
    panels had started to rebound since the summer.
    In other results,
    Seiko Epson Corp., the world’s second-largest ink jet printer maker
    after Hewlett-Packard Co., posted a group net loss of 1.16 billion yen
    ($10.1 million) for the April-September first half, compared with a
    profit of 39.47 billion yen a year earlier.
    The result came as
    little surprise since Seiko Epson last week revised its earnings
    estimates for the first half to a net loss of 1.1 billion yen from its
    prior forecast for a 2.0 billion yen loss, to reflect cost cuts in its
    LCD operations.
    That followed a sharp downward revision last month
    when Seiko Epson cut its full-year net profit forecast in half to 22
    billion yen due to intense competition in the ink jet printer market
    and sluggish sales of LCD panels and LCD driver chips.
    the tough market environment, ink jet printer rival Lexmark
    International Inc. on Tuesday said its quarterly profit fell by more
    than half as it suffered a dramatic slump in demand for its ink and
    Shares of Sharp rose 1.3 percent during the first half ended
    last month while shares of Seiko Epson fell 27 percent, compared with a
    7.2 percent gain in Japan’s electrical machinery subindex .
    Prior to
    the announcement, Sharp closed down 0.8 percent at 1,592 yen. Seiko
    Epson closed up 0.4 percent at 2,865 yen, compared with the electrical
    machinery subindex’s 0.38 percent rise.