Sharp second-quarter operating profit slides as Japan sales tax hike weighs

Reuters News
|
Posted: Oct 31, 2014 1:17 AM

By Sophie Knight

TOKYO (Reuters) - Japanese electronics maker Sharp Corp said on Friday its second-quarter operating profit slipped 18.3 percent, missing forecasts, as a consumption tax increase in Japan squeezed sales of electronic parts, TVs and white goods.

Sharp's operating profit for July-September fell to 24.5 billion yen ($224 million) from 30 billion yen in the same period a year earlier. That was below an average estimate of 28.2 billion compiled from seven analyst forecasts gathered by Thomson Reuters StarMine.

But Sharp reiterated its full-year operating profit forecast of 100 billion yen, saying earnings from its growing liquid-crystal display (LCD) panels business more than tripled in the first half of the year amid increasing orders from Chinese smartphone makers. In the year ended March 2014, operating profit was 108.6 billion yen.

Sharp is working its way through a restructuring to reduce reliance on products like TVs in the wake of heavy losses in recent years when it was undercut by cheaper Asian rivals. In a shift more pronounced than at other Japanese electronics makers, it's increasingly focusing on selling LCDs to customers like Apple Inc and a new breed of Chinese smartphone makers.

For the second quarter, the company said its display panels division accounted for three-quarters percent of operating profit, up from less than 59 percent in the same period a year earlier.

By 0505 GMT, Sharp shares were up 3.8 percent, in line with a broad market rally and a 4.4 percent gain in the benchmark Nikkei triggered by unexpected move by Japan's central bank to ease monetary policy.

(Reporting by Sophie Knight; Editing by Kenneth Maxwell)