Japan’s Sharp Corp today said it would exit the TV set business in the Americas and consider additional measures to grow finances, after it posted a bigger than expected quarterly loss on weak sales of smartphone displays.
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For April-June, Sharp booked an operating loss of 28.8 billion yen ($231.87 million), from 4.7 billion yen profit a year prior.
It’s important to stress, too, that while Sharp may have been forced to bail out of its second major global TV market in two years, it certainly can’t yet be considered a dead man walking.
“Sharp has not been able to fully adapt to the intensifying market competition, which led to significantly lower profits compared to the initial projections for the previous fiscal year, and has been suffering from poor earnings performance”, Sharp said in a statement explaining the TV business sale. The company will also be selling off its TV manufacturing plant in Mexico and will license its brand to be used in the Americas by China’s Hisense Group.
The embattled Aquos-brand maker has said it would sell the building that houses its Osaka headquarters to raise cash, roll out unspecified pay cuts, and launch a drastic capital reduction plan to wipe away huge losses.
Atsushi Osanai, an associate professor at Waseda Business School who used to work at Sony’s TV arm, said Sharp should focus on unique consumer electronics goods, such as its Tea-Care automated tea makers and direct-current air conditioners, which Sharp says would increase power efficiency. It reiterated its outlook to achieve 80 billion yen ($644.54 million) in operating profit in the current business year.
Likewise, the company now has the rights to use the “Sharp” brand and all its channel resources in North and South America.
The company suffered a loss of ¥222.35 billion in the fiscal year ended in March. Its shares have fallen almost 50 percent over the past year amid worries about the firm’s long-term viability.
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“Our company is still in a severe management condition”, Takahashi told a press conference in Tokyo. “We will continue to accelerate restructuring efforts to realize the medium-term plan announced in May”, he concluded.
