Sharp Corp share price down, logs climbing revenue, expects soaring sales in China

Sharp Corp, Japans largest LCD screen manufacturer, reported earnings today, revealing an increase in both revenue and operating profit, and trimming quarterly net losses. The Osaka-based company still expects a sizable profit through years end, on the back of booming sales to Chinese manufacturers.

Revenue for the three months through June 30 was ¥619.7 billion (about $6.02bn), up 1.94% on an annual basis, while operating income grew by 53.33% from a year ago to ¥4.6bn. Net losses were logged at ¥1.7bn, compared with a ¥17.9bn loss the year before.

The companys improving performance is largely attributed to its LCD panel business, which generated ¥168.9bn sales and an operation profit of ¥2.1bn, in sharp contrast with last years Q1 result of a ¥9.5bn loss. 65% of the sales and all the profit in the division came from the more profitable small panels, which are primarily used in smartphones and tablets.

Sharp is said to be already supplying screens for Apples iPhone 6, set to launch in September, which will probably boost Sharps books in the next quarter. Sharps other major customer, South Korean giant Samsung, revealed a slowdown of growth in the last quarter, though mostly on account of serious Chinese competition, which is also supplied by Sharp. Sharp said it expects revenue from Chinese smartphone makers to increase five times to ¥100bn in the first half ending September.

Sharp still expects its annual profit to more than double to ¥30bn in the year to March 2015, as the company is still reeling from a ¥545.4bn loss in the year to March 2013.

Sharp Corp was down 0.61% to trade at ¥324.00 per share as trading closed in Japan today, logging a drop of 21.17% from a year ago. The last price gives the company a market capitalization of ¥554.60bn. According to the Financial Times, 13 analysts offering 12 month price targets for Sharp Corporation have a median target of ¥290.00, with a high estimate of ¥500.00 and a low estimate of ¥200.00.