Sharp’s Stock, at 30-Year Low, Trails Its Rivals
Sharp has been left behind in a rally of Asian consumer-electronics stocks, with its shares touching a three-decade low as reliance on the saturated market for liquid-crystal-display televisions sapped earnings.
Shares of Sharp are down 24 percent in 2012, compared with those of Japanese rivals Sony, Panasonic and South Korea’s Samsung Electronics and LG Electronics, each having gained more than 10 percent this year. Sharp’s stock fell to its lowest since 1979 on March 14 after failing to meet quality standards to supply screens for Apple’s new iPad. The same day, the company named a new president after forecasting a record annual loss.
“Investors are coming to suspect that Sharp’s slump is more serious than thought,” said Makoto Kikuchi, chief executive officer at Myojo Asset Management in Tokyo. “There is a concern over possible fundraising as losses are expected to continue next year.”
Sony and Panasonic forecast record losses on their TV units for the current fiscal year, after ceding market share to Korean producers in an industry where prices have plunged by half in three years. Almost half of Sharp’s revenue in fiscal 2010 came from LCD TV and large panel sales, compared with 17 percent for Sony and 11 percent for Panasonic, according to Kazuharu Miura, an analyst in Tokyo at SMBC Nikko Securities.
Sony’s music, film and finance businesses and Panasonic’s plan to boost sales of energy-saving products by combining its housing and electronics units will drive a turnaround for those companies, Myojo Asset’s Kikuchi said. Sharp is expected to lose about 20 billion yen ($240 million) next year, as it struggles because of its focus on TVs, flat-panel screens and a loss- making solar cell division, Miura said.
With Sony and Panasonic, the three companies combined forecast $16 billion in losses for year ending March 31, citing falling TV prices and a strong yen that’s eroding profit from overseas sales.
Takashi Okuda, who will become president of the Osaka-based company on April 1, said on Monday that Sharp wants to sell more screens to the medical and automobile industries, which would help to make up for the decline in TV sales,
The company plans to speed up introduction of products using its own technology. Sharp is making final adjustments to its Igzo displays, which are small and medium-size high-performance panels using oxide semiconductors, he said. Demand for TVs won’t rise in the fiscal year starting April 1, Okuda said.