The world’s biggest smartphone-and-tablet screen-maker Japan Display has seen its share price tumble to record lows after it was forced to cut profit estimates for the year by nearly 11 per cent.
The LCD joint venture - which comprises the display units from Sony, Hitachi and Toshiba – said in a note on Monday that it was revising down its profit forecast for FY 2013 from ¥30.4bn (£180m) to ¥27.2bn (£160m), a decrease of 10.5 per cent.
The firm provided the following brief explanation for its decision:
At the end of the consolidated fourth quarter, JDI experienced reduced purchases at customer request as well as reduced purchases of certain products due to difficult price negotiations in light of a decline in market prices for displays for medium price-range smartphones. As a result, net sales were lower than forecasted net sales indicated in JDI’s earlier earnings forecast. On the profit side, lower net sales resulted in decreased operating income and ordinary income.
Unsurprisingly the market didn’t react well to the announcement.
Japan Display shares fell 16 per cent to close on Monday at ¥672 – way below their ¥900 IPO price, according to Bloomberg.
The firm will now be hoping that there are no setbacks to rumoured contracts for the iPhone 6, which is said to be coming in 4.7in and 5.5in versions.
Pics purporting to show a larger-screened iPhone appeared on the Chinternet recently, although there have been mutterings that the 5.5in version will be delayed.
Japan Display also faces unsettling competition from Asian rivals in the LTPS space, especially in China, which are increasingly undercutting on price – in what could become a worrying trend for the firm. ®