Japan Display pulls back the curtain
While not scheduled to reveal 1Q fiscal 2017 results until May 10, Japan Display (6740.JP) added a bit to their forecast. They expect a ~$100m foreign exchange loss for the full year 2016 and an additional $31.8m loss in the 4th quarter (January thru March). Further the company will reverse $187.5m in deferred tax assets, based on internal structural reforms. The net result to fiscal 2016 results is as follows:
Japan Display Revised company forecast - Source: Company Data
The company also indicated that 4th quarter sales exceeded the company’s forecast, however ‘longer than expected launch periods and yield improvements for a part of new products’ resulted in higher manufacturing costs, and will put operating income below company forecasts. Further, yen appreciation and lower selling prices will lower net sales by ~10% y/y but are offset by cost reductions and lower foreign exchange losses that will ‘shrink’ ordinary losses in FY 2016. All in, after last year’s restructuring charge and this year’s deferred tax asset reversal, the full year loss will be approximately the same as last year. No dividend will be issued, as was the case last year.
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