Japanese electronics maker Sharp said Friday it swung back to profit for the three months to June thanks to cost-cutting efforts under Taiwan’s Hon Hai.
The Taiwanese company, better known as Foxconn, last August acquired the Japanese industrial mainstay which had been pummelled by huge losses and mounting debts, 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 growing competition.
The recovery was mainly due to brisk sales and structural reforms, including cost-cutting, the company said.
“The impact of cost-cutting restructuring under Hon Hai is becoming visible,” said Hideki Yasuda, an analyst at Ace Research Institute in Tokyo.
“Sharp’s survival simply depends on whether it can release hit products and something other companies can’t copy,” Yasuda told AFP before the earnings release.
Sharp said it booked a net profit of 14.5 billion yen ($131 million) for the April-June quarter, reversing 27.5 billion yen in net loss a year ago, while sales jumped 19.6 percent to 506.4 billion yen.
Osaka-based Sharp left its full-year forecast unchanged, projecting 59 billion yen in net profit for the current fiscal year to March on annual sales of 2.51 trillion yen.
Over the past decade Sharp bet heavily 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.