Profits disappear at Sharp and Sony

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Profits disappear at Sharp and Sony

Japanese electronics maker Sharp is slashing 5,000 jobs over the next year, or nearly 9 percent of its global workforce, after its quarterly loss ballooned from a year earlier.

Osaka-based Sharp reported Thursday that its April-June loss swelled to 138.4 billion yen ($1.8 billion) from 49 billion yen of red ink a year earlier.

Quarterly sales plunged 28 percent to 458.6 billion yen as sales crashed in liquid crystal displays, flat-panel TVs and mobile phones.

Sharp forecast a bigger loss for the business year through March 2013. It now expects a 250 billion yen loss compared with the 30 billion yen loss it projected earlier.

Sharp said the job cuts will come through voluntary and mandatory retirement and other arrangements.

Shares in Japanese electronics giant Sharp plunged 30 percent in Tokyo trade yesterday.

Another Japanese electronics maker Sony on Thursday reported a widening quarterly loss and trimmed its profit forecast for the year, again underscoring the challenges faced by Japan’s troubled electronics giants.

Hammered by giant losses, particularly in the television business, the sector has been struggling with a strong yen, falling prices, high labor costs and competition from foreign rivals such as Korea’s Samsung.

Weak demand in Europe, a key market for everything from Japanese televisions and mobile phones to vehicles and electronics parts, has also dented their results with the continent’s turmoil threatening to get worse.

Sony rivals Sharp, Panasonic and Toshiba have also felt the pain amid a sagging global economy.

“The operating environment for Sony in the first quarter .?.?. continued to be severe due to factors including a slowing of the global economy and entrenchment of the appreciation of the yen exchange rate,” it said Thursday.

For the fiscal first-quarter through June, the maker of PlayStation videogame consoles and Bravia televisions said its net loss widened to 24.6 billion yen, dwarfing a 15.5 billion yen loss a year ago.

AFP

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