Sharp reported a ‘red’ second quarter with a loss of $936m (¥74.8 billion) as compared to the same quarter last year where it managed to post positive results with $376m (¥30.1 billion) in profits. The company has mortgaged most of its offices and manufacturing units in a bid to raise some extra cash that will enable it stay afloat and deter its financial turmoil for now. It has also booked a $1.1bn (¥84.4 billion) restructuring charge [pdf].
In a statement, the TV maker said that because of the loss in the second quarter it sees “negative operating cash flow” and that “this raises serious doubts about [our ability] to continue as a going concern.” Reuters is reporting that the TV maker is not doing well and has pegged a full year net loss forecast of $5.6bn (¥450 billion). Investors may be worried with recent lackluster performance of Sharp’s share prices which saw a 75 per cent decline since January.
The troubled TV maker has further announced that it will be enforcing pay cuts and is going to sell off its assets in a bid to save as much cash as possible. The decline does point towards a complete collapse but, it might not happen this year. With nearly 10,000 job cuts and Foxconn’s plans of buying 9 per cent stake in Sharp, the company may very well make it to the shores again. Foxconn is betting on Sharp’s long term future and the full-year net loss forecast is not going to shroud its buying decision.
Sharp has also revealed that it may leave the consumer segment altogether despite the fact that it has nearly a century worth of presence in this vertical.