New | Japan’s Sharp issues profit warning as shares tumble to 2-year low
The warning dashed investor hopes that growing sales to Chinese smartphone makers like Xiaomi could provide a new springboard for Sharp as it emerges from years of restructuring
Japan’s Sharp Corp warned it will likely miss this year’s earnings target as an intensifying price war with cheaper Asia rivals in display panels and TVs cuts deep into the consumer electronics maker’s profit margins.
Sharp shares skidded 9 percent to two-year lows after the maker of screens for Apple Inc’s iPhones said it now doesn’t expect to meet an earlier forecast a 30 billion yen (US$255 million) net profit in the 12 months ending March.
The warning dashed investor hopes that growing sales to Chinese smartphone makers like Xiaomi could provide a new springboard for Sharp as it emerges from years of restructuring.
Sharp and Japanese technology firms like Sony Corp have lost billions of dollars in recent years as aggressive, cash-rich competitors like South Korea’s Samsung Electronics and China’s Huawei poached customers.
Sharp alone racked up combined losses of around $8 billion over two years up to April 2013 before cost cuts and restructuring helped it eke out a profit in its latest fiscal year.
Due to report earnings for the period ended December on February 3, Sharp didn’t issue a new net profit estimate.