Sharp Sales, Profits Hit by LCD Price Competition

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Sharp saw sales drop 12 percent in the nine months to December as competition increased in the LCD panel and television markets, it said Wednesday.

The company saw demand for flat-screen TVs drop in markets outside of Japan and was also pinched by price drops in the LCD panel market. Sharp sells LCD panels to competing TV makers for use in their sets and saw sales in this category drop by 31 percent compared to the same period in 2008, it said.

A net loss of ¥8.6 billion (US$95 million) was recorded for the period, but that's an improvement on the ¥37.8 billion Sharp lost in the equivalent period a year earlier.

Demand for solar cells was strong and sales rose 10 percent due in part to Japanese government subsidies for the installation of solar panels and an increase in the price at which electricity companies must buy surplus solar energy from consumers. Sharp is aggressively expanding its solar business and in the nine-month period its importance to the company increased. Solar cell sales of ¥144 billion meant the business was worth 7.1 percent of overall sales, up from 5.7 percent in the year earlier.

The only other of Sharp's six main business areas to see sales climb in the nine months was its health and environmental equipment division, which benefited from demand for air purifiers featuring Plasmacluster Ion technology.

The four remaining business sectors saw overall drops in sales due to lower prices and falling demand for some products, such as printers and copiers.

The company doesn't break out figures for the October to December period. Its nine-month results suggest sales of ¥735 billion during the quarter, according to calculations by IDG News Service. That's unchanged from the same period in 2008. The same calculations indicate Sharp achieved a net profit of ¥9 billion in the final three months of 2009 against a ¥65 billion loss in the same period in 2008.

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