Sharp Corp, the world's largest maker of liquid-crystal-display televisions, said first-quarter profit rose more than expected as sales of large-screen models helped the company weather price declines.
Net income climbed 23 percent to ¥23.9 billion (US$205 million) in the three months ended June 30, from ¥19.4 billion a year earlier, Sharp said in a statement yesterday. The company's average selling prices fell 4 percent, compared with an industrywide decline of 30 percent.
Leading LCD supplier
"Sharp has already established its leading position in the liquid-crystal display television market," said Haruo Otsuka, who oversees about US$870 million in assets at Toyota Asset Management Co in Tokyo.
"The prospects for earnings growth is quite solid and it's rather risky not to hold the stock," Otsuka said.
Sales gained 13 percent in the quarter to ¥693.7 billion. Operating profit, or sales minus the cost of goods sold and administrative expenses, rose to ¥40.4 billion from ¥35.6 billion a year earlier.
Profit from LCD panels, the biggest contributor to earnings, rose 24 percent to ¥16.1 billion in the first quarter, from ¥13 billion a year earlier. Sales of the panels increased 37 percent to ¥231.7 billion.
Sales of screens measuring 32 inches and above diagonally accounted for 45 percent of all LCD TVs sold in the quarter, up from 32 percent a year earlier, Sharp said.
Handset sales up
Sales of Sharp's mobile phones, which contributed 19 percent to total revenue, rose 24 percent to a quarterly record of ¥131.6 billion, boosted by its Aquos-brand handset, which features a 6.6cm LCD screen for TV viewing. About 3.47 million units were sold, up 22 percent from a year earlier.
Sharp retained its financial forecasts -- made in April -- for this fiscal year with net income projected to rise to a record ¥100 billion, operating profit to climb 10 percent to ¥180 billion and revenue to increase 7.3 percent to a record ¥3 trillion.
LG.Philips LCD Co, which generated 47 percent of sales from panels used in computers, earlier this month posted a record loss of 322 billion won (US$338 million) and said it would cut capital spending by about 30 percent to 3 trillion won this year after piling up record inventories of screens.
"We don't make PC panels, which are cheaper," said Hiroshi Saji, a Sharp executive vice president told reporters in Osaka.
"LCD-panel prices for TVs declined more than expected, but we expect the fall to slow as demand expands toward" the year-end Christmas sales, he added.
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