Sharp fears for future as Japan TV makers bleed
By Tim Kelly
TOKYO (Reuters) - Struggling Japanese TV maker Sharp Corp warned it might not be able to survive on its own, as it almost doubled its full-year net loss forecast to $5.6 billion, and said it was considering alliances with other companies.
In a statement, the company said it booked massive second-quarter losses and is seeing "serious negative operating cash flow." "This raises serious doubts about (our ability) to continue as a going concern," it said, adding it was taking steps, from pay cuts and asset sales to voluntary redundancies, to generate cash flow.
Sharp has been in talks for months with Hon Hai Precision Industry Co Ltd about the Taiwan-based group becoming its biggest shareholder. Sharp said on Thursday it expected an agreement on that before a March deadline, but added it was considering other alliances as well.
"Perhaps it will not fail within this year, but I don't think Sharp has a viable business in the next 3-5 years," said Tetsuro Ii, CEO of Commons Asset Management in Tokyo. "The company hasn't got much time left and they need to cut off businesses that they can, conserve cash and ... produce something that's really competitive."
Sharp CEO Takashi Okuda told reporters: "We have lots of great technology and we want to tap that asset to revive and make money, but I can't say we are now a company with that vitality."
Bigger Japanese rival Sony Corp, which blazed a trail in the early 1980s with its Walkman portable music players, made a small operating profit in July-September, helped by the sale of a non-core chemicals business, and kept its forecast for a full-year profit of $1.63 billion.
But the maker of Bravia TVs, Vaio laptops and PlayStation game consoles said it expects to sell fewer of its hand-held PSP and Vita consoles this year - 10 million - than it previously estimated. It also cut forecasts for sales of its TV sets - to 14.5 million - and compact digital cameras - to 16 million - but kept its PlayStation home console sales estimate at 16 million, and maintained its forecast to sell 34 million smartphones. Continued...