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Sharp to post massive second quarter loss, lay off thousands of employees

Sharp may be preparing to lay off thousands of employees and sell off Tokyo real estate as it racks up losses in the LCD business, the Nikkei business daily reported.

The company, which is among Japan’s last standing major LCD panel manufacturers, will likely post a net loss of 100 billion (£822.4 million) for the year’s second quarter, the paper said. The figure is a fair bit higher than analysts’ estimates that it would post a net deficit of 87 billion (£715.5 million).

The company’s stock dropped up to its lowest figure since 1975 following news of the quarterly loss.

"We are considering various measures to tackle the difficult situation, and will disclose the details when it is finalized," a Sharp spokesperson said in a statement.

Earlier in July, Sharp reached a $198.5 million (£128 million) out-of-court settlement with Dell in a price-fixing dispute over the company’s thin film transistor (TFT) displays, further deepening its April - June deficit.

During the year’s first quarter, Sharp saw a record loss of 376 billion yen, after soft demand for its LCD TVs left the company with a stockpile of unsold products.

Though Sharp forecasts TV sales will shrink by 19 per cent, it expects to make up for that loss by ramping up its production of LCD panels for use in smartphones and tablets.

In a last-ditch effort for funding after it predicted massive annual losses, Sharp sold a 46.68 per cent stake in its main Sakai plant and an 11 per cent stake in the company to Foxconn in March.