Sharp Reports Record Revenues and Profits

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Sharp (OTCPK:SHCAY) set company records for revenues and profits in the first half and second quarter of this year. It credits "brisk demand" for its Aquos LCD TVs and "steady growth" of its mobile handsets. Sharp maintained its full-year guidance, which will also set new revenue and profit records. reports Sharp's group operating profit increased 26% in the quarter ended September 30th to 49.7 billion yen ($416.9 million), while sales grew 7% to a record 771.9 billion yen ($6.5 billion). XFN-ASIA newswire reports Sharp earned a record net profit of 46.54 billion yen ($391 million) in the first-half, or an increase of 27.5%, versus 36.49 billion yen ($307 million) last year. Operating profit and revenue in the first-half also set new records, with the former increasing by 20.1% to 90.17 billion yen ($758 million), and the latter growing 9.7% to 1.46 trillion yen ($12.3 billion).

Sharp is still expecting to earn 100 billion yen ($840 million) in net group profit on 3 trillion yen ($25 billion) in sales for the full-year ending March 31, 2007.

The newswire said Sharp sold 2.52 million LCD TVs in the first-half for a 46% y-o-y increase. Mobile handset sales totaled 6.2 million units for a 5% y-o-y increase. During this fiscal year Sharp plans to sell 6 million LCD TVs and 13 million handsets.

Sharp's Senior Executive VP Hiroshi Saji had the following comments:

Led by brisk demand for our Aquos-brand LCD TVs and steady growth of our mobile handsets, revenue as well as all profits hit a record for the first semester.

With sales of 37-inch models or larger ones picking up pace, the average selling price of Sharp's LCD TVs dipped only two percent in the first half, while overall LCD prices fell 20 percent.

We started selling 46-inch and 52-inch full high-definition models this month using panels from the new (Kameyama 2) plant. We now have a strong line-up of large-sized TVs necessary to boost our overseas market share.

We understand that demand for our key products, such as LCD TVs and cellular phone handsets, will continue to be solid, but we need to assess the extent of the slowdown in the US economy and ascertain if this will have any impact on our profit trend. (Source: Reuters, Forbes XFN-ASIA newswire)

Sharp's ordinary shares (Tokyo: 6753) lost 30 yen (1.43%) ahead of its after-hours earnings announcement to close at 2,070 yen ($17.40). Its ADRs closed at $17.70 yesterday. Its closing share price for today was not available at the time of this post.

In the statement accompanying its earnings release Sharp said it plans to increase its annual dividend by 2 yen, or 9%, to 24 yen/share, making it the 7th consecutive year of dividend hikes. Sharp also said it understands the importance of "increasing the number of individual shareholders from the standpoint of its capital management." Thus, it plans to become even more shareholder friendly and is considering reducing its share trading unit size. Its ordinary shares currently trade in 1,000 share units meaning it would cost over 2 million yen ($16,750) to purchase shares.

Detailed earnings related information for Sharp can be accessed at its IR website.

Recommended reading: LCD Producers Continue To Add Too Much Capacity As They Battle for Market ShareSharp vs Sony: LCD TV Battle Heating Up in Japan

Sharp Corp (OTCPK:SHCAY) 1-year chart:

Disclosure: The author doesn't own shares of Sharp.

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Tagged: , Earnings, Electronic Equipment, Japan
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