Sharp full-year loss shrinks 90% after Hon Hai deal

Cash-strapped Sharp was bought out by Taiwan's Foxconn in August

Sharp said Friday its full-year net loss shrank by 90 percent and it swung to operating profit on structural reforms after being acquired last year by Taiwan's Hon Hai.

The Taiwanese company, better known as Foxconn, acquired the Japanese industrial mainstay pummelled by huge losses and mounting debts in August, taking a 66 percent stake for $3.7 billion.

The first foreign acquisition of a major Japanese electronics firm marked a watershed for Japan's once-mighty home electronics sector, which nurtured global brands including Sony and Panasonic but has struggled in the face of foreign competition.

Sharp said that for the latest fiscal year to the end of March its net loss shrank to 24.9 billion yen ($224 million) from 256.0 billion yen a year earlier.

Sales fell 16.7 percent to 2.1 trillion yen, but the Osaka-based firm booked an operating profit of 62.5 billion yen, reversing the previous year's loss of 162.0 billion yen.

The smaller net loss and operating profit turnaround was partially due to structural reforms, including cost-cutting, Sharp said.

Recoveries and improved profitability in several businesses, including display devices and air conditioners, also contributed, it said.

"Sharp is gradually recovering as the positive impact of Hon Hai restructuring is materialising," Hideki Yasuda, an analyst at Ace Research Institute in Tokyo, said before the results.

"Sharp's survival simply depends on whether it can release hit products."

Sharp did not announce its forecast for the current fiscal year that ends in March 2018.

Over the past decade Sharp bet almost everything on liquid crystal displays (LCDs), boasting the most advanced technology in the world.

But that turned into a weakness when the market became more competitive after the 2008 global financial crisis and lower-cost rivals dug into its profits.

While the firm still produces cutting-edge LCD screens, it has lacked the huge research and development funds necessary to keep ahead of the competition.