Sharp on the Mend – Posting First Profits Since 2014

In case you missed it the storied yet beleaguered LCD pioneer, Sharp Corp. (Osaka, Japan) was finally in the black, with net income of $37.5M for fiscal Q3 (Oct – Dec 2016). This is the first positive net income posted for the company in two years, as well as a first for Sharp under its new parent company Foxconn (Hon Hai Precision) of Taiwan.

Key to its Q3 turn around was “…a boost in Sharp’s liquid-crystal display business, which reported a $98M profit in the latest quarter,” along with plus one-half a billion dollars ($554M) in overall cost cutting measures according to a report in Japan Times late last week. By the numbers, Sharp’s operating income for the fiscal Q3 was $168M generating the net income of $37.5M. It’s a remarkable turnaround when compared to same quarter numbers last year that generated a loss of $34M.

Sharp agrees to Hon Hai buy out back in March 2016But the company is not out of the woods yet, as it’s full fiscal year performance that ends in March 2017 is still likely to remain in the red with a $333M loss. These forecast numbers were recently improved by Sharp, by 2% in projected revenue ($18.3B) and operating income improvement of 45%, now forecast at a $333M loss for the fiscal year. A yearly loss projection as high as $474M (on average) came from industry analysts, and Sharp’s own figures originally saw its shortfall at $374M, before the company improved its full year forecast (trimmed the loss outlook).

One more thing; there is a rumor of Apple switching its display component in the next gen iPhone from LCD to OLEDs. That would mean moving from Sharp and other small LCD suppliers like LG, to mainly Samsung display components. Samsung dominates in small OLED panels. This would have a major impact on Sharp’s small display business. We’ve been tracking more recent news In the small display space, where OLEDs are on the march, see: Digitimes Research: China makers aggressively expanding AMOLED capacity , Samsung Display plans to expand AMOLED module factory in Vietnam

Sharp Corp. was founded in 1912 in Japan, claiming its namesake from its first product, the EverSharp mechanical pencil. Sharp grew to dominate the early LCD TV market and many other electronic devices (mobile phones) sold in Japan. They were top sellers in Japan’s mobile phone market from 2005 through 2008, and still a top contender there, along with Fujitsu, Apple and Sony. They also still dominate TV sales in the island nation, but never could translate that best seller marketing prowess to other key geographies like the US and EU.

Hard times and near bankruptcy drove Sharp to seek outside investment including a $100M infusion from Samsung in 2013. Then, after several rounds of false starts, renegotiated stock value offers and one or two no-shows, Foxconn finally gained a control of Sharp in March 2016 for $3.5B. That’s a far cry from the original 2012 offer of $806M from Foxconn for just 10% of the company, (putting the original valuation at over $8B.)

Sharp is one of those amazing technology pioneer companies that continually innovated, yet failed to fully benefit from it’s technology innovation and above all from its early start. In 2000, Sharp was the first to dedicate all TV output to the LCD flat screen. The company also invented the world’s first camera phone, the JSH04 (in 2000) and in early TV days dominated the largest screen on the block with the first 65-inch diagonal (2005) and first 108-inch set just two years later (in 2007.) Not to mention the world’s first HD, 4K and even 8K LCDs. There is so much more they’ve contributed to LCD technology, but that is beyond the scope of this report. Suffice it to say we celebrate the good news and hope to see the trends continue on the road to realizing its financial abundance. – Steven Sechrist

There’s more Sharp TV news:

Sharp Launches the Ultimate Large LCD Display for Commercial Applications

Sharp To Show New 70″ Video Wall Display

France: 6.5m TV sets sold in 2016

Foxconn Makes Plans for UHD & 8K Panels

Foxconn Posts December Results