July 29, 2016 / 6:26 AM / a year ago

Sharp first quarter loss shrinks on cost cuts, but revenue plunges by a third

A man using his mobile phone walks past Sharp Corp's liquid crystal display monitors showing the company logo in Tokyo, Japan, March 30, 2016.Yuya Shino/File Photo

TOKYO (Reuters) - Japanese electronics maker Sharp Corp reported a smaller first-quarter loss helped by restructuring and cost cuts, although revenue shrank by a third as demand for its products slumped.

The ailing company, which is due to be acquired by Taiwan's Foxconn, said it was hit by a drop-off in demand for smartphone camera modules, TV and tablet displays and by a decline in Chinese demand for consumer electronics. Demand for solar panels in Japan also fell.

Revenue tumbled 32 percent to 423.4 billion yen ($4.1 billion). Its April-June operating loss was 2.5 billion yen, in line with analysts' estimates and narrowing from a loss of 28.8 billion yen a year earlier.

The company has not released an earning forecast for the current business year due to its impending acquisition by Foxconn, known formally as Hon Hai Precision Industry.

The logo of Foxconn, the trading name of Hon Hai Precision Industry, is seen on top of the company's headquarters in New Taipei City, Taiwan March 29, 2016.Tyrone Siu/File Photo

Seeking control of Sharp's advanced screen technology and to wanting to strengthen its position with major client Apple Inc, Foxconn plans to spend some $3.7 billion to take a 64 percent stake in the Japanese firm.

But it was unable to complete the acquisition in June as planned as antitrust clearance from China has not been forthcoming. The agreement between the two companies call for payment to be made by Oct. 5.

"The delay hasn't had any impact, but we want to move ahead as quickly as we can to realize synergies with Foxconn," said Katsuaki Nomura, the Japanese company's chief financial officer.

Foxconn founder Terry Gou has said there will have to be layoffs at Sharp to turn around the ailing panel maker, but pledged that wages would rise.

Asked about media reports saying that Sharp would lay off as many as 7,000 people, Nomura said that no decisions have been made.

Reporting by Tim Kelly; Additional reporting by Maki Shiraki; Editing by Edwina Gibbs

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