After experiencing unprecedented losses of 10 billion U.S. dollars last year, Japanese electronics giants have tried to create a brand new start, but the dismal performance of the two giants Sony and Sharp on August 2 showed that they still have long way to go.
In the latest round of smartphone booms that swept the world, these giants not only failed to profit, but even their flat-panel TVs are proud of their losses.
In addition, in the face of the continued rise of the Japanese yen, Japanese electronics companies have done nothing and have chosen to lay off their employees and restructure their management.
September next year is a Kanshapo 2 said that in the April-June quarter net loss of 138 billion yen (1 yen is about 0.08122 yuan), the company will start the first large-scale layoffs since the 1950s, plans to cut 5000 jobs, accounting for about 9% of the total number of employees worldwide. Among them, most of the vacancies are from two factories in Japan, one is a factory that produces televisions and audio-visual products, and the other is a factory that produces solar panels.
Takashi Okuda, president of Sharp in June this year, said that this is a last resort.
Sharp now expects that the company will have a net loss of 250 billion yen in the latest fiscal year in March next year. Sharp previously thought optimistically that the loss in the latest fiscal year was 30 billion yen. In the previous fiscal year, Sharp set a record of a net loss of 376.1 billion yen.
"Sharp no longer has enough capital buffers to withstand commercial risks." Japan's Japan Credit Rating Agency (Japan Credit Rating Agency) issued a report on the 2nd, cutting Sharp's debt rating by two notches to A-.
September next year is a hurdle for Sharp, when it will have 200 billion yen of convertible bonds due.
Ratings agency Moody's also added fuel to Sharp's short-term debt rating from Prime-2 to Prime-3, the lowest investment grade. Moody's warned that Sharp may be further downgraded.
Hon Hai "Is willing to increase Sharp"
Sharp's problems have arisen from the large-scale LCD panel factory in Japan that was built in Sakai, Sakai, in western Japan in late 2009. When the market slows down, Sharp appears to have excess inventory, and at the same time decided not to let the factory run at full capacity. In March of this year, Sharp and Taiwan’s foundry giant Hon Hai Precision Industry Co., Ltd. (Hon Hai Precision) signed an unprecedented agreement. Sharp sold 37.6% of the Sakai plant’s interest to Hon Hai Precision, which agreed to spend the money. About 800 million U.S. dollars, acquiring 10% of Sharp's shares, this bid is equivalent to 550 yen per share.
On the evening of August 3, Gou Hai of Gou Ming Ming announced that he plans to renegotiate the terms of the equity purchase agreement with Sharp and purchase the latter shares at a lower stock price. On the same day, Sharp's share price plummeted by 28% to 188 yen, affected by performance data far below the market's expectations. It briefly touched the 187 yen daily limit in the session. Reuters said that at present, Sharp's market value has only about 2.7 billion US dollars.
Hon Hai Precision also reiterated that if Sharp is willing to sell more shares, Hon Hai is willing to negotiate. Local Taiwan media reported that Hon Hai wants to get a seat on Sharp's board of directors.
"Sharp has fewer options"
Like Sharp, Sony also lowered its profit forecast on the 2nd, but it was much smaller. Sony expects its net profit will narrow to 20 billion yen in the latest financial year ending in March next year. Previously, Sony once estimated that the net profit of the latest fiscal year could reach 30 billion yen.
Sony announced that it had a loss of about 24.6 billion yen in the second quarter and plans to cut 10,000 jobs in the latest fiscal year. In April of this year, Kazuo Hirai replaced Sterlinger and became CEO of Sony.
Reuters commented that, on the whole, TV sales of Japan's three major TV makers are expected to decrease by about 10 million units this year. However, Sony also has film companies, insurance businesses, and gaming divisions. Panasonic has a battery and auto-equipment business that can offset losses in the television business. Sharp has fewer options.
In the latest round of smartphone booms that swept the world, these giants not only failed to profit, but even their flat-panel TVs are proud of their losses.
In addition, in the face of the continued rise of the Japanese yen, Japanese electronics companies have done nothing and have chosen to lay off their employees and restructure their management.
September next year is a Kanshapo 2 said that in the April-June quarter net loss of 138 billion yen (1 yen is about 0.08122 yuan), the company will start the first large-scale layoffs since the 1950s, plans to cut 5000 jobs, accounting for about 9% of the total number of employees worldwide. Among them, most of the vacancies are from two factories in Japan, one is a factory that produces televisions and audio-visual products, and the other is a factory that produces solar panels.
Takashi Okuda, president of Sharp in June this year, said that this is a last resort.
Sharp now expects that the company will have a net loss of 250 billion yen in the latest fiscal year in March next year. Sharp previously thought optimistically that the loss in the latest fiscal year was 30 billion yen. In the previous fiscal year, Sharp set a record of a net loss of 376.1 billion yen.
"Sharp no longer has enough capital buffers to withstand commercial risks." Japan's Japan Credit Rating Agency (Japan Credit Rating Agency) issued a report on the 2nd, cutting Sharp's debt rating by two notches to A-.
September next year is a hurdle for Sharp, when it will have 200 billion yen of convertible bonds due.
Ratings agency Moody's also added fuel to Sharp's short-term debt rating from Prime-2 to Prime-3, the lowest investment grade. Moody's warned that Sharp may be further downgraded.
Hon Hai "Is willing to increase Sharp"
Sharp's problems have arisen from the large-scale LCD panel factory in Japan that was built in Sakai, Sakai, in western Japan in late 2009. When the market slows down, Sharp appears to have excess inventory, and at the same time decided not to let the factory run at full capacity. In March of this year, Sharp and Taiwan’s foundry giant Hon Hai Precision Industry Co., Ltd. (Hon Hai Precision) signed an unprecedented agreement. Sharp sold 37.6% of the Sakai plant’s interest to Hon Hai Precision, which agreed to spend the money. About 800 million U.S. dollars, acquiring 10% of Sharp's shares, this bid is equivalent to 550 yen per share.
On the evening of August 3, Gou Hai of Gou Ming Ming announced that he plans to renegotiate the terms of the equity purchase agreement with Sharp and purchase the latter shares at a lower stock price. On the same day, Sharp's share price plummeted by 28% to 188 yen, affected by performance data far below the market's expectations. It briefly touched the 187 yen daily limit in the session. Reuters said that at present, Sharp's market value has only about 2.7 billion US dollars.
Hon Hai Precision also reiterated that if Sharp is willing to sell more shares, Hon Hai is willing to negotiate. Local Taiwan media reported that Hon Hai wants to get a seat on Sharp's board of directors.
"Sharp has fewer options"
Like Sharp, Sony also lowered its profit forecast on the 2nd, but it was much smaller. Sony expects its net profit will narrow to 20 billion yen in the latest financial year ending in March next year. Previously, Sony once estimated that the net profit of the latest fiscal year could reach 30 billion yen.
Sony announced that it had a loss of about 24.6 billion yen in the second quarter and plans to cut 10,000 jobs in the latest fiscal year. In April of this year, Kazuo Hirai replaced Sterlinger and became CEO of Sony.
Reuters commented that, on the whole, TV sales of Japan's three major TV makers are expected to decrease by about 10 million units this year. However, Sony also has film companies, insurance businesses, and gaming divisions. Panasonic has a battery and auto-equipment business that can offset losses in the television business. Sharp has fewer options.
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