Japan’s Sharp to exit Americas TV market after deep first quarter loss

The Japanese electronics maker said it would sell its TV manufacturing plant in Mexico and license its brand in the Americas to China’s Hisense Group.

Japanese electronics giant Sharp said Friday its net loss widened in April-June as it struggles through a painful restructuring and weak sales of display screens and smartphones.

The result was far worse than its group net loss of ¥1.79 billion in the same quarter past year.

Earlier this year, Sharp announced it was cutting 10 percent of its 49,000 positions worldwide as part of a turnaround plan intended to keep it afloat after posting a bigger-than-expected $1.86 billion annual loss. The acquisition will help Hisense gain an upper hand in both North and South America with the extended market capacity.

Investors and analysts have called for Sharp to overhaul its liquid crystal display (LCD) and consumer electronics divisions.

Chief Executive Kozo Takahashi said on Friday the company would consider a wide range of options for the panel business, including injecting cash from outside, and didn’t rule out the possibility that Sharp would spin off the unit and grant an external body majority control. The decision follows the failure of Sharp’s restructuring efforts to return the business to profit this year. 77 billion, fueled doubts among analysts over the company’s forecast for an operating profit of Yen80 billion for the current fiscal year.

The company suffered a loss of ¥222.35 billion in the fiscal year ended in March. Its stock has fallen almost 50 percent over the past year due to concern about the firm’s long-term prospects.

On Thursday, Sony said its quarterly profit more than tripled as its PlayStation videogames and smartphone component sales got a lift while Panasonic’s operating profit weakened.

Reeling from the poor performance of its core LCD business, Sharp has taken steps to cut costs, including seeking the voluntary retirement of 3,500 employees, slashing employee salaries and bonuses for employees and putting its headquarters up for sale.

“Our company is still in a severe management condition”, Takahashi told a press conference in Tokyo.