Consumer electronics maker Sharp reported a swing to a quarterly profit on solid demand for LCD TVs and solar cells and maintained its annual profit outlook today, in line with market expectations.
Sharp, the world's fourth-largest LCD TV maker and a major supplier of display panels to other TV producers, has gained from strong flat screen TV demand in emerging markets such as China, which shored up panel prices and kept supplies tight.
But the cost of getting a new LCD panel factory in western Japan up and running held down profits in the latest quarter, Sharp said.
The factory uses so-called 10th-generation glass substrates, which are bigger than earlier-generation substrates, allowing it to make panels more efficiently amid tough price competition with rivals such as South Korea's Samsung.
"We saw strong LCD TV sales in Japan and China, where we sell high-margin products," Sharp Director Tetsuo Onishi said on the sidelines of a news conference. "Of course cost cuts also helped."
Sharp, which trails Samsung, Sony and LG Electronics in LCD TVs, kept its forecast for an annual operating profit of 50 billion yen ($552 million).
That would be a turnaround from a 55.48 billion yen loss a year earlier.
Global sales of displays used in LCD TVs will likely surge 40 percent to $49.2 billion this year amid a shift in demand to large and more advanced panels, research firm iSuppli said last week, boding well for Sharp and other electronics makers.
Operating profit was 21.0 billion yen in October-December, up from a 15.86 billion yen loss a year earlier.
Prior to the announcement, shares in Sharp closed down 0.4 per cent at 1,132 yen, underperforming the Tokyo stock market's electrical machinery index, which rose 0.4 per cent.
Sharp shares have climbed 16 per cent over the past three months, beating the subindex's 9 per cent gain.
Sharp competes with Sanyo Electric and Q-Cells in the solar cell market.
Reuters