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Sharp expects to return to profit for 1st time in 4 years


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Sharp expects to return to profit for 1st time in 4 years

Japanese consumer electronics maker Sharp Corp. said May 26 that it expects to return to profit for the first time in four years through restructuring and sales growth of its signature liquid crystal display products.

The Osaka, Japan-based maker of audiovisual goods and home appliances forecast net profit of ¥59 billion for the year ending March 31, 2018, compared with a loss of ¥24.88 billion. If achieved, it would be Sharp's first net profit since fiscal 2014.

For fiscal 2017, Sharp also expects operating profit to jump 44% to ¥90 billion from ¥62.45 billion on a projected 22% increase in sales to ¥2.51 trillion from ¥2.05 trillion. The company pointed to small- and medium-sized LCD panels and LCD TVs to fuel sales growth, and ongoing restructuring measures to support profit. Sharp returned to profit at the operating level for the first time in three years in the fiscal year ending March 31, 2017.

The profit goal comes less than a year after Sharp ceded control of its business to Hon Hai Precision Industry Co. Ltd. The company sought help after struggling with losses triggered by ill-timed investments in its LCD display factories. Hon Hai, also known as Foxconn Technology Group, bought a 66% stake in Sharp in August 2016, beating out other bidders, including Innovation Network Corp. of Japan, a government-backed fund aimed at turning around and developing companies with cutting-edge technology.

Sharp also unveiled a new three-year business plan, which calls for more than doubling profit in three years through the enhancement of the internet of things, display and smart technologies.

The company said it aims to boost its operating profit by 140% by March 31, 2020, to ¥150 billion from ¥62.45 billion in fiscal 2016. The company also said it wants to increase net sales by nearly 59% in the same period to ¥3.25 trillion from ¥2.05 trillion.

The business plan, which outlines strategies for the years between fiscal 2017 and 2019, highlighted the internet of things as one of the key technologies it wants to maximize. The company will launch four new business areas that focus on the internet of things: electronic devices, smart homes, smart business solutions, and advanced display systems.

The plan calls for changing the business model as well as expanding the company's presence outside of Japan. Sharp said that while it was engaged in a wide range of businesses and owned unique technologies and products, it needed to strengthen its product lineup, upgrade its facilities and increase investment in its overseas operations.

As of May 25, US$1 was equivalent to ¥111.87.