Tue, Oct 23, 2007 - Page 11 News List

Sharp predicts raw materials, ventures will eat into profits


Sharp Corp, pioneer of liquid-crystal-display (LCD) screens, warned yesterday that it was expecting net profits to slip in the first half of the business year because of increasing costs attached to its investments and raw materials.

But the Japanese company said it expected sales to increase thanks to robust LCD sales, and it did not revise its projections for a full-year rise in net profit.

Osaka-based Sharp, known for its Aquos brand of flat-panel TVs, projected a net profit of ?43 billion (US$375 million) for the six months to Sept. 30, down 7.6 percent from the same period the previous year.

It forecast in a statement that the operating profit would likely slip 12.4 percent to US$79 billion.

Still, the company left its profit outlook for the full fiscal year unchanged at ?1.64 trillion, up from ?1.47 trillion the previous year.

Sharp said the reasons for the anticipated fall in net profit included the cost of building its new LCD plant in Poland, which produces LCD modules for the European market.

Sharp also said that rising costs of raw materials and revisions to tax laws were expected to hit the company's bottom line.

Sharp, which last year was the world's third-biggest LCD TV maker in terms of revenue, is due to report its first half earnings on Thursday.

Last month, Sharp and Pioneer Corp announced that they had commenced a capital and operations tie-up in a deal aimed at reducing development costs through joint projects and the sharing of technology.

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