Sharp warns of 'serious' difficulties: 'We may not survive'

Sharp warns of 'serious' difficulties: 'We may not survive'

Summary: The Japan-based TV maker has warned that it is sinking and may not be able to sustain itself for much longer, after the firm warned of a forecasted multi-billion dollar loss for the fiscal year.

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TOPICS: Tech Industry
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Sharp issued its strongest warning to date that it may not be able to survive, as sinking profits and operating losses continue to drag down the beleaguered firm.

The liquid-crystal display (LCD) and television maker reported a second quarter operating loss of ¥74.8 billion ($936m), compared with a ¥30.1 billion ($376m) profit a year ago. It also booked a ¥84.4 billion ($1.1bn) charge in restructuring

Sharp has also mortgages the majority of its offices and manufacturing plants in Japan, including a factory that develops iPhone and iPad displays, in a bid to generate much-needed income to support itself through its prolonged financial rut. The Tokyo, Japan-based firm also said it was looking to other companies to seek help from other companies.

The troubled TV maker is sinking rapidly, and forecast a full-year net loss of ¥450 billion ($5.6bn). 

In a statement, Sharp said: "This raises serious doubts about [our ability] to continue as a going concern," noting that it was cutting pay and selling off assets, along with mass redundancies to claw back as much cash as it can.

While the failing company continues to seek loans from various Japanese banks in return for massive job cuts, as much as 10,000 jobs, it's not expected that Sharp will collapse this year. Taiwanese manufacturer Hon Hai (Foxconn) said earlier this year that it will continue with plans to buy a 9.9 percent stake in Sharp, despite the firm's forecast massive losses. Hon Hai said it was looking to the long term rather than just the next two to three months.

Around the same time as the Hon Hai pledge for investment, Sharp said it may leave the consumer business altogether, in spite of more than a century in the sector.

Between Sony, Panasonic, and Sharp, three Japanese display makers and electronics manufacturer, who have all reported financial troubles -- albeit Sony and Panasonic not on the scale of Sharp's decline -- are set to make 10 million fewer television sets between them in 2012 than the previous year, making a combined loss of around $21 billion.

Sharp's shares have declined by more than 75 percent since January. Its shares fell again close to 2 percent today ahead of the firm's earnings release.

(via Reuters)

Topic: Tech Industry

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8 comments
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  • Reasons of the steep decline?

    I would like to know why there is a sudden slide from last year profit to this year $5.6B loss. If Sharp is the manufacturer of all the 13+ inches LCD screens with 1377 x 768 resolution, that might be the reason.
    RelaxWalk
  • Not a fan of Sony

    Of all of these guys, the only one I really would want to see tank is Sony, although I realize the prospect of that is pretty far fetched even in troubled times. I've never forgiven Sony for the rootkits on audio CDs and then needlessly legally destroying the kid who reversed engineered the PS3's protection system. They've done some other generally bullying things too.
    Robert Showalter
    • Wow, you are stupid.

      They never destroyed anyone for "reverse engineering" the PS3's protection system. Rootkits on audio CD's? Proof that it happened? And proof it was THEM and not the CD manufacturer or one employee that planted them? You have no reason to hate. "Bully"? Again, where is the proof, moron.
      Parafrost
      • Old saws come to mind...

        When reading your comment, the old saying about it being better to keep your mouth shut and be thought an idiot rather than to open your mouth and remove all doubt comes to mind.

        Perhaps you should have done a search for information on Sony and rootkits before opening your mouth. Even a quick scan of Wikipedia would have found the following:

        http://en.wikipedia.org/wiki/Sony_BMG_copy_protection_rootkit_scandal

        Just perhaps losing a couple of lawsuits might indicate that Sony was indeed responsible.

        As for the legal destruction, that might have been a bit of hyperbole. OTOH, the case did cost George Hotz a large amount in legal fees. See the following URL for the consent decree.

        http://www.wired.com/images_blogs/threatlevel/2011/04/geohotaccord.pdf

        As it stands, it would appear that you have indeed removed all doubt that your IQ is in the room temperature range on a Celsius thermometer.
        DNSB
  • Sharp sux

    My Sharp TV died in three years.

    Maybe they should not survive, if they're making junk.
    harvey_rabbit
    • Another idiot...

      Mine has lasted 10 - 12 years and is still working perfectly fine.
      Parafrost
  • My opinion

    I have no opinion about Sharp. Nonetheless I really wanted to express my opinion that I have no opinion. I also wanted to stress that I do not hate Microsoft. It is in no way related to Sharp and its financial situation but still I feel that I had to make this clear to all internet community. My opinion about Panasonic, LG and Toshiba are neutral. I had one TV that died few years ago but unfortunately I threw it out without looking at the label. Now I do not know what brand should I hate and it makes me sad. Can you imagine how hard it is to come to internet forums and have nothing to hate. It is truly depressing. This is why I sometimes pretend that I hate some things. Dunkin donuts... arrrrgh!!!!
    paul2011
    • This is quite hilarious.

      With that, I only hate one company; LG. Reasons are mainly poor products and false accusations against other companies cause they know they are not as good.
      Parafrost