Sharp shares dive 30% to arrive at near 40-year low
August 4, 2012, 12:11 am TWN
TOKYO -- Shares in Japan's Sharp dived almost 30 percent to their lowest level in nearly four decades Friday, after the consumer electronics giant warned its annual loss would be bigger than first thought.
The company's shares slumped as low as 187 yen in earlier Tokyo trade after saying Thursday it lost 138.4 billion yen (US$1.77 billion) in the April-June quarter, nearly three times more than the same period last year, and warned of a big full-year shortfall.
It was the stock's lowest level since November 1974, according to Dow Jones Newswires. The firm's market capitalization tumbled 88.8 billion yen (US$1.1 billion) at one stage.
Sharp's stock recovered slightly by the closing bell Friday, ending down 28.08 percent at 192 yen.
Adding to the bad news, Standard & Poor's later Friday lowered its credit rating on Sharp and said its financial situation had "worsened beyond our expectations."
The global ratings agency said it cut Sharp's credit rating by one notch to "BBB" — ninth on a 22-point rating scale — and warned of another possible downgrade.
On Thursday, Sharp said it now expected a net loss of 250 billion yen for the fiscal year through March 2013, a huge increase from an earlier projection of a loss of 30 billion yen.
It also said it would have to slash 5,000 jobs worldwide, its first cuts since 1950.
Last year the firm posted a loss of 380 billion yen, blaming restructuring costs and delayed shipments of liquid crystal displays (LCD) used in mobile devices.
The company, which has seen its mainstay television, LCDs and solar panel products struggle, said the job reductions were part of a bid to cut fixed costs by 100 billion yen to help its balance sheet.
Sharp currently employs 57,000 people globally.