Sharp Corp. announced a Q2 FY16 net loss of ¥17.9 bn ($175 mn) on Q2 FY16 net sales of ¥496.2 bn ($4.8 bn), resulting in a negative profit margin of 3.6%. Both the net loss and net sales figures were better than Q1 FY16 results, at ¥27.4 bn ($254 mn) and ¥423.3 bn ($3.9 bn) respectively, and with a negative profit margin of 6.5%.
However, the H1 FY16 net sales at ¥919.6 bn ($8.8 bn) showed a sharp decline of 28.1% as compared to H1 FY15 net sales of ¥1279.6 bn ($10.5 bn). This was mainly due to lower sales of small and medium-size LCDs and camera modules to major customers, the shift to a brand licensing business for LCD TVs in the Americas, and a downturn in the Japanese smartphone market.
Faced by these challenges, the company implemented structural reforms (labour related) and severe cost/overhead reductions leading to lower H1 FY16 net losses at ¥45.4 bn ($428 mn) as compared to H1 FY15 net losses of ¥83.6 bn ($686 mn).
Foxconn (which now owns Sharp) has forecast a return to profit for the LCD business ($245 million) for the full year to March.