Sharp Headed For First-Ever Annual Loss; Cuts 1,500 Jobs

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Sharp hasn't been spared the gloom and doom currently sweeping electronics makers. The Japanese company on Friday reported a loss for its third fiscal quarter, warned investors it was headed for its first-ever annual operating loss and said it would cut 1,500 non-regular jobs and seek to cut overall costs by 200 billion yen ($2.20 billion).

Sharp representatives told Bloomberg News the loss will be about 100 billion yen ($1.1 billion) for the fiscal year ending March 31.

In its earnings statement, released on Friday, Sharp said its revised forecast was due to the global recession, and included the estimated amount of restructuring charges it would incur from the reorganization of LCD plants. The earnings also make note of a loss on impairment of investments in securities due to stock market declines, plus the $120 million (12 billion yen) Sharp had to pay for its role in a price-fixing scandal that also nailed LG and Chunghwa late last year.

Sharp is the world's No. 3 maker of LCD TVs, behind Samsung and LG. Demand for the displays has plummeted worldwide; DisplaySearch, an NPD Group company, has predicted global LCD-TV sales will fall 16 percent in 2009.

Sharp previously said it would curb plans with Sony for a joint production and sales venture for LCDs. That partnership has been pushed off to 2010, according to Sharp, and the company in January closed small and midsize LCD panel manufacturing lines at two of its flagship plants in Japan.

"The situation may improve a bit in the coming fiscal year, but it's highly questionable whether Japanese manufacturers like Sharp can make a profit," said Yoji Takeda, an analyst with RBC Investment (Asia) in Hong Kong, to Bloomberg.

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