* Q3 oper profit Y21.0 bln vs Y15.9 bln loss yr earlier
* Annual outlook unchanged, in line with consensus
* Sales of high-margin flat TVs in Japan, China lead recovery
* Costs related to start-up of new LCD plant cap profits
* Shares down 0.4 pct ahead of results, lag sector index
(Adds analyst comments)
By Kiyoshi Takenaka
TOKYO, Feb 3 (Reuters) - Japan's Sharp Corp reported a
smaller-than-expected quarterly profit on Wednesday reflecting
start-up costs at its new display panel plant but forecast tight
LCD supply for 2010, raising hopes for a further earnings
recovery.
Sharp, the world's fourth-largest LCD TV maker and a major
supplier of display panels to other TV producers, brought
onstream its cutting-edge LCD factory in October.
The $4.8 billion facility, located in the western Japan city
of Sakai, is designed to enable Sharp to offer cost-competitive
LCD panels, but one-off costs associated with the start-up
weighed on its profitability in October-December.
Operating profit at Sharp, which trails Samsung Electronics
Co Ltd, Sony Corp and LG Electronics Inc in LCD TVs, was 21
billion yen ($233 million) in the three months.
That was up from a 15.86 billion yen loss a year earlier but
fell short of a consensus for a 27.5 billion yen profit in a poll
of 5 analysts by Thomson Reuters I/B/E/S.
"My first impression is a little negative," Mizuho Securities
analyst Ryosuke Katsura said.
"I'm afraid the results were bearish even after taking into
consideration expenses for bringing the new plant up to speed and
sluggish demand for small LCD panels."
Sharp managed to turn profitable in the latest quarter as
solid sales of high-margin LCD TVs in Japan and China as well as
brisk demand for solar cells and cost cuts more than offset a
slide in LCD panel profit.
Sharp competes with First Solar Inc, Q-Cells and Sanyo
Electric Co Ltd in the solar cell market.
For the year to March, the maker of Aquos LCD TVs kept its
forecast for an operating profit of 50 billion yen and predicted
favourable market conditions for its LCD business in the first
three quarters of the new business year from April 1.
The full-year outlook is a turnaround from a 55.48 billion
yen loss last year and roughly on a par with a market consensus
for a 51.4 billion yen profit.
"I see tight supply in the quarters starting in April, July
and October, with demand in emerging markets growing," Sharp
Executive Vice President Toshishige Hamano told a news
conference.
"I wouldn't worry about unit shipments, although we naturally
will have to live with some price declines."
Hamano's comments follow a quarterly earnings announcement by
rival panel maker LG Display Co Ltd last month which gave a
robust quarterly outlook as improving demand for personal
computers and flat-screen televisions boosts shipments.
Global sales of displays used in LCD TVs will likely surge 40
percent to $49.2 billion this year amid a shift in demand to
larger and more advanced panels, research firm iSuppli said last
week, boding well for Sharp and other electronics makers.
Prior to the announcement, shares in Sharp closed down 0.4
percent at 1,132 yen, underperforming the Tokyo stock market's
electrical machinery index, which rose 0.4 percent.
Sharp shares have climbed 16 percent over the past three
months, beating the subindex's 9 percent gain.
($1=90.28 Yen)
(Additional reporting by Nathan Layne, Chikafumi Hodo and Yumi
Horie; Editing by Michael Watson)
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