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Sharp sees 23 percent rise in annual operating profit
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Sharp's logo is seen at an electronic shop in Tokyo October 29, 2009.
Credit: Reuters/Kim Kyung-Hoon
TOKYO |
Fri Jun 3, 2011 2:42am EDT
TOKYO (Reuters) - Japan's Sharp Corp forecast a 23 percent jump in annual operating profit on Friday as growing demand for smartphones and tablets bolsters sales, confounding analysts' estimates for a dip in income.
For the year ending next March 31, Sharp expects an operating profit of 97 billion yen ($1.2 billion) compared with a consensus of 56.8 billion yen, based on the average of 30 forecasts by analysts polled by Thomson Reuters I/B/E/S.
As part of a strategy aimed at tapping the burgeoning tablet market, Sharp said on Thursday it will switch most production at its Kameyama LCD plant in western Japan to smaller panels used in the popular devices.
Once a mainstay of the company's LCD TV business, the plant was being increasingly seen as redundant in the face of competition from manufacturers in South Korea, Taiwan and elsewhere.
Analysts expect global tablet sales to soar to more than 50 million in 2011. The new market remains dominated by Apple Inc, which sold nearly 15 million of its iPads in nine months of 2010, but is attracting a stream of new entrants.
Separately, Sharp said on Friday it will source midsized panels from an "alliance partner."
The Nikkei business daily reported that Sharp is in talks with Taiwan's Hon Hai Precision to jointly procure parts used for LCD production.
The company was forced to suspend production at two TV panel plants, including its state-of-the-art 10th generation factory at Sakai in April, after the March 11 earthquake triggered a plunge in demand and shortages of a gas used in panel production.
For the current business year Sharp expects to sell 15 million flat-screen TVs compared with 14.8 million the previous year.
Like many of its rivals, Sharp delayed its annual earnings guidance as it weighed the impact of the disaster on consumption and its supply chain.
Shares of Sharp were up 1.5 percent at 748 yen in late trade compared with a 0.6 percent fall in the Nikkei average.
($1 = 80.895 Japanese Yen)
(Reporting by Isabel Reynolds; Editing by Michael Watson)
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