It is due to a number of write-offs the company had to make.
In the first half of the current fiscal year alone (April to September, 2012), Sharp said it made a net loss of 387.5 billion yen as a result of rising restructuring costs and falling demand for LCD televisions.
It booked 84.4 billion yen of extraordinary charges as it wrote off the value of surplus display inventory and pulled out of solar panel manufacturing.
It also wrote off 61 billion yen of so-called deferred tax assets – corporate-tax credits it could redeem if it returned to profit. But that's a prospect that doesn't look good for now.
Maybe the firm needs to just focus in on just a few of its more profitable business units and sell of the rest. That way it could stay independent, and run leaner and meaner. Easy to say, tough to do, I know... but it's not like the company doesn't have a choice.
If Sharp gets rid of its LCD operation, there is really nothing left.
It's got solar, but that's tanking -- everywhere in the world.
Presumably, Sharp could focus on small-screen LCDs for mobile. But then, again, that's a very competitive market.
The fact that it makes harder for a Japanese company to make a huge change, as discussed in the thread here, is the following. Japanese companies, in general, are not in the habit of ruthlessly cutting employees at the first sign of decline in any given quarter.
They won't act fast.
But to their credit, Japanese companies are much more paternalistic. They see themselves socially responsible for taking care of their employees.
Being socially responsible is actually making lots of sense for me...we tend to dump engineers in North America at every sign of biz weakness...good for companies, perhaps, not so good for the society at large...kris
I agree, Kris.
I feel ambivalent every time when I report on quarterly results.
But those are the early warning signs no companies should take it lightly, and they should come up with a strategy -- quickly.
If Sharp runs themselves into ground, then, there will be no Sharp and no place to work!