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The
statement came after the Nikkei business daily reported that
Sharp forecasts operating profit of about 40 billion yen ($385
million) for the business year through March. That would compare
with the 6.6 billion yen average of 11 analyst estimates in a
Thomson Reuters I/B/E/S poll.
Meeting the forecast would mark the first operating profit in
three years for Sharp, which is rebuilding under Taiwan's
Foxconn. The world's biggest contract electronics manufacturer,
formally known as Hon Hai Precision Industry Co Ltd, bought
two-thirds of Sharp for 388.8 billion yen in August.
Sharp cut about 6,000 jobs to 43,500 in the last financial year
through early retirement and an operations overhaul including
withdrawal from its money-losing North American TV set business.
On Wednesday, Sharp said it expected profit to improve but
revenue to fall. Its shares subsequently jumped nearly 11
percent to their highest price in about six months, far
outperforming the benchmark Nikkei average share price index.
"Sharp stopped the bleeding by cutting fixed costs, but that's
only a stopgap measure," said analyst Hideki Yasuda at Ace
Research Institute. "It's still unclear how the company can
attain its topline growth. It needs to find a new growth
driver."
The prospects of Sharp's mainstay display panel business - the
root cause of its decline - remain dim.
The global panel market is on the cusp of improvement as a
production cutback resolved a supply glut and new product
launches including Apple Inc's latest iPhone temporarily boost
demand.
But Sharp still has to find ways to compete with Chinese peers
rapidly expanding capacity, and with South Korean makers far
ahead in next-generation technology. Apple is widely expected to
adopt that technology - organic light-emitting diode (OLED) -
for future versions of its iPhone, analysts said.
Sharp said it would provide a full-year earnings forecast on
Nov. 1, when it announces its second-quarter results.
($1 = 103.8200 yen)
(Reporting by Chang-Ran Kim, Taiga Uranaka and Makiko Yamazaki;
Editing by Edwina Gibbs and Christopher Cushing)
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