|Financial results for the second quarter of fiscal 2011 (July through September, 2011) will be explained in comparison with the first quarter (April to June, 2011). For more detailed information on the six months ended September 30, 2011, please refer to the financial release and supplementary data.
Noteworthy points related to the consolidated financial results for the second quarter of fiscal 2011 include:
For the second quarter, Sharp recorded both higher sales and higher income compared to the first quarter.
In particular, operating income was 8.5 times that of the first quarter, and net income made a significant recovery from the net loss posted in the first quarter.
With respect to the previously announced forecast (June 3, 2011), we did not achieve sales projections for the first half of fiscal 2011 due to the economic slowdown in the major markets including U.S., Europe and China, turmoil in financial markets and the impact of price reductions. However, we were able to achieve results nearly in line with projections for both operating and net income.
Consolidated financial results for the second quarter (July through September, 2011) recorded net sales of 674.2 billion yen, up 5.3% compared to the previous quarter (April to June, 2011). Operating income was 30.0 billion yen, 8.5 times that of the previous quarter, and the operating income ratio was 4.5%. Net income for the second quarter was 9.4 billion yen, an improvement of 58.7 billion yen over the first-quarter net loss of 49.2 billion yen, which resulted from a loss on suspension of large-size LCD plant operations.
As explained in the Management Strategy Information Meeting held on June 3, 2011, Sharp is working on its LCD business restructuring, focusing on two key initiatives: 1) strengthening its mobile LCD business for which the Kameyama Plant will serve as the production hub, and 2) expanding its large-size LCD business by emphasizing LCD panels for large-size TVs 60 inches and larger as well as for non-TV applications. We have already started to incur costs for these initiatives ahead of schedule.
Through these initiatives and cost-cutting measures, in the second quarter we were able to return to profitability in the LCD business and continue to remain profitable in the LCD TV business, where many TV manufacturers have been forced into the red.
Our business results made a rapid recovery from the first quarter to the second quarter, and despite a severe business environment in which we have not yet achieved our initially set sales targets, we were generally on track in profits, and we believe this is the result of our LCD business restructuring efforts.