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Sharp Posts Loss, Forms LCD Venture With Sony

7/30/2009 11:06:00 AM Eastern

Osaka, Japan - Sharp Electronics reported a loss and a 20 percent drop in sales in its fiscal first quarter, ended June 30.
At the same time Sharp announced a joint venture with Sony to produce and sell large-sized LCDs and modules.
Sharp reported that while Asian markets for its products have improved, the slowdown in the U.S. and Europe hurt its performance.
Sharp posted sales of $6.32 billion, down 20 percent from the prior year's first quarter, and a net loss of $266.2 million, compared with net income of $262.9 million for the same period last year.
Sales of A/V and communications were $3.2 billion, down 11.9 percent, with sales declining for LCD TVs and mobile phones. Blu-ray Disc players and recorders did well, the company reported.
Sales of its information products were down 14 percent to $6.6 billion.
In components, sales of LCDs were down 42 percent to $978.1 billion compared with the same time last year. Price declines on large LCDs for TVs and a "sluggish market for small and medium-sized LCDs" were to blame.
Sharp and Sony have formed a joint venture called the Sharp Display Products Corporation (SDP) that will produce and sell large-sized LCD panels.
On July 1, Sharp split out its new LCD panel plant located in Sakai City, Japan, which is under construction, and transferred it to SDP, which is scheduled to commence operations in October.
On Dec. 29, as the first step toward the final investment ratio (66 percent by Sharp and 34 percent by Sony), Sony will invest 10 billion yen into SDP in exchange for new shares to be issued by SDP to Sony as third-party allocation.
SDP will seek to maximize the advantages gained from using the world's first 10th-generation glass substrates to produce large-sized LCD panels and modules, Sharp said.
Sharp estimates production at 72,000 substrates per month (initially 36,000 substrates per month) and that the investment for the joint venture will be about 430 billion yen (including leased assets).