Sharp expects FY 2008 operating loss of 30 bil. yen, 1st since 1953

TOKYO, Feb. 6 Kyodo -
Japanese electronics maker Sharp Corp. said Friday it expects to incur a group
operating loss of 30 billion yen for the current business year through March,
the first full-year loss since it began releasing earnings results on an
operating level in 1953.
The projected loss, blamed on sluggish demand and falling prices of digital
products amid the global economic downturn, compares with its October forecast
of 130 billion yen in operating profit and a year-earlier profit of 183.69
billion yen.
Given the outlook, Sharp said it will cut 1,500 nonregular workers when their
contracts expire and cut monthly executive pay between 5 to 30 percent for
seven months starting from next month. It will also not pay a summer bonus in
June, leading to a 30 to 50 percent wage cut in annual terms.
The company said it hopes to reduce 200 billion yen in costs by cutting
personnel expenses and closing down some production lines for liquid crystal
display panels at two plants in western Japan.
Sharp joined droves of other big-name Japanese electronics makers such as Sony
Corp., Hitachi Ltd. and Toshiba Corp., all struggling to fend off huge losses
through jobs and production cuts.
In its second downward revision of earnings forecasts for all of fiscal 2008,
the Osaka-based firm also said it anticipates a group net loss of 100 billion
yen. Sharp last fell into the red in 1950 on a parent-only basis. It is also
the first group net loss since it began compiling consolidated reports for
fiscal 1977.
The company earlier estimated 60 billion yen profit and logged 101.92 billion
yen profit for the previous year.
Group sales are expected to total 2.9 trillion yen, compared with the
previously estimated and year-earlier sales of 3.42 trillion yen.
During the October-December period, sales of its mainstay products fell across
the board including a 20.9 percent drop in sales of LCDs, which came under
triple pressures of lackluster consumer spending, falling prices and a stronger
yen. The only bright spot was an 18.1 percent growth in sales of solar cells.
''The global economic downturn has deepened since last October and fears of a
further slowdown are growing,'' Tetsuo Onishi, Sharp's corporate director in
charge of accounting, said at a press briefing in Tokyo, noting that a recovery
in the fourth quarter is difficult despite the cost cuts.
Sharp also logged 21.7 billion yen in costs to restructure its LCD plants and
appraisal losses of about 43 billion yen due to the plummeting value of its
stake in Pioneer Corp. It also booked 12 billion yen in costs in connection
with a fine imposed by U.S. authorities for conspiring to illegally fix prices
in the sale of LCD panels.
For the April-December period, Sharp said it incurred a group net loss of 37.81
billion yen in a reversal from a profit of 72.91 billion yen logged a year
earlier. It posted an operating profit of 34.90 billion yen, down 73.4 percent
from a year earlier, on sales of 2.30 trillion yen, down 10.3 percent.
The company said it expects to pay a full-year dividend of 21 yen per share,
compared with 28 yen it paid last year. It plans to pay 7 yen per share for the
second half of the fiscal year, down from a year-earlier 14 yen.
==Kyodo