TOKYO (Reuters) - Sharp Corp on Friday said it would exit the TV set business in the Americas and consider more steps to shore up its finances, after reporting a deeper-than-expected quarterly loss on weak sales of smartphone displays.
The Japanese electronics maker said it would sell its TV manufacturing plant in Mexico and license its brand in the Americas to China’s Hisense Group. In a separate statement, Hisense said it would pay $23.7 million for the business.
Osaka-based Sharp was once a highly profitable manufacturer of premium TVs and a favoured screen supplier to Apple Inc, but has struggled to innovate enough to fend off Asian rivals.
In May, the company sought $1.9 billion in its second major bank-led financing in three years. In return, it promised to cut 5,000 jobs, or 10 percent of staff.
“Sharp has not been able to fully adapt to the intensifying market competition, which led to significantly lower profits compared to the initial projections for the previous fiscal year, and has been suffering from poor earnings performance,” Sharp said in a statement explaining the TV business sale.
Investors and analysts have called for Sharp to overhaul its liquid crystal display (LCD) and consumer electronics divisions. Chief Executive Kozo Takahashi initially resisted but on Friday said he was open to major restructuring including some kind of strategic deal for its LCD business.
“The market environment is now even tougher than what we expected in May” when Sharp sought financing, Takahashi told reporters.
“We haven’t yet made any specific decision, but we need to consider a wider range of options than we did back in May ... when we said we were definitely going to carry on with the LCD business in its current form.”
For April-June, Sharp booked an operating loss of 28.8 billion yen ($231.87 million), from 4.7 billion yen profit a year prior. The result was worse than the 21.2 billion yen average loss estimate of 14 analysts polled by Reuters.
Net loss deepened to 34 billion yen from 1.8 billion yen.
For the full year through March, Sharp reiterated its operating profit forecast of 80 billion yen, saying, “The goal is a V-shaped recovery.”
Ahead of the results, shares of Sharp closed unchanged from the previous day compared with a 0.3 percent rise in the broader market. Its stock has fallen nearly 50 percent over the past year due to concern about the firm’s long-term prospects.
($1 = 124.2100 yen)
Reporting by Ritsuko Ando; Editing by Christopher Cushing