SONY Sony Group Corporation

TOKYO—Japan Display Inc. said Tuesday it would report a nearly $300 million loss in the recently ended fiscal year, another sign of how slower sales of Apple Inc.'s iPhones are hitting suppliers.

Apple uses the Japanese company's panels in displays for the iPhone and iPad. For the year ended March 31, Japan Display said it expected to report a net loss of ¥ 31.8 billion ($293.5 million), wider than the previous year's loss of ¥ 12.3 billion. It also said operating profit and revenue would come in lower than previously projected. The company said it would release the final numbers on Thursday.

A government-backed fund, the Innovation Network Corp. of Japan, created Japan Display in 2012 by merging units from Sony Corp., Toshiba Corp. and Hitachi Ltd. Japan Display had an initial public offering in 2014, but it quickly hit bumps and its share price fell far below the offering price. The company's market capitalization is now less than $1.2 billion.

The latest results pointed to intensifying hardship for the company with the global smartphone market becoming saturated. In addition to Apple, Japan Display supplies Chinese handset makers, but the price of the display component has been falling on fierce competition. The yen's recent rise has also hurt Japan Display. It said it incurred a loss of ¥ 11.2 billion in the March quarter because of currency shifts.

Japan Display hopes to achieve renewed growth with Apple's expected introduction of a newer type of display called OLED, or organic light-emitting diode. Apple hasn't commented on its plans, but analysts say the shift could take place in the next few years.

Even if that happens, Japan Display would be playing catch-up against the display units of South Korean rivals Samsung Electronics Co. and LG Electronics Inc. The Japanese company has yet to establish a factory to mass-produce OLED displays. Meanwhile, Japan's Sharp Corp., which agreed in March to accept a takeover by Taiwan's Foxconn Technology Group, is also eyeing the OLED market.

INCJ, the government-backed fund, remains Japan Display's largest shareholder. It had hoped to combine Japan Display with Sharp's display unit to increase efficiencies, but lost out to Foxconn in the battle for control of Sharp.

Write to Takashi Mochizuki at takashi.mochizuki@wsj.com

(END) Dow Jones Newswires

May 10, 2016 07:25 ET (11:25 GMT)

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