Sharp has posted a 14 percent gain in quarterly profit buoyed by robust demand for its liquid crystal display (LCD) TVs, and stood by its annual outlook that matched market expectations.
Sharp, which competes with Sony, Samsung Electronics and Philips Electronics for the top spot in the LCD TV market, saw brisk sales in Japan, where its Aquos brand commands strong appeal. In Australia spends little on marketing with their range of LCD TV’s being significantly overpriced when compared with other brands.
Crumbling panel prices, which hit LG.Philips LCD hard, had limited impact on Sharp as most of its large-sized LCD panels are used in-house for its flat TVs. Sharp, which also benefitted from strong mobile phone sales, reported an operating profit of 40.43 billion yen for April-June, broadly in line with a consensus forecast of 39.3 billion yen in a poll of five analysts by Reuters Estimates.
That is up from 35.56 billion yen a year earlier. Sales in the quarter rose 12.6 percent to 693.7 billion yen Price falls for flat TVs picked up pace after the World Cup soccer tournament, raising concerns about Sharp’s earnings trend for the current quarter onwards. In a bid to fight the price erosion and to meet fast-growing demand, the company plans to bring the world’s first plant that cuts LCD panels from eighth-generation glass onstream by October.
Eighth-generation glass is bigger than the seventh-generation glass now used by Sony and Samsung in their joint venture, and allows LCD makers to produce large-sized panels economically.
The Osaka-based company stuck to its operating profit forecast in April of 180 billion yen ($1.54 billion) for the full-year to March, in line with the consensus of 17 analysts polled by Reuters Estimates, and up from 163.71 billion yen a year earlier.
Shares in Sharp closed up 3.1 percent at 1,892 yen ahead of the announcement, outperforming the Tokyo stock market’s electrical machinery index which rose 2 percent.
Sharp lost 13.3 percent in the three months to June 30, while the sub-index slid 7.5 percent.