Sony ups forecasts after cuts pay off

City A.M. Reporter
SONY said it expects to have swung to a surprising annual operating profit in the last financial year and beat forecasts after cost-cutting.

The maker of Bravia TVs and Cyber-shot cameras has shed jobs and shut plants due to the global downturn and worked to boost its flat TV division, which has struggled amid fierce competition with Samsung Electronics and other rivals.

Sony chief executive Howard Stringer, who took the helm at the company in 2005 and vowed to deliver growth, is holding high hopes of a shift to 3D.

That would help the company sell TVs, digital cameras, Blu-ray DVD players and videogames, which could harness the technology. The electronics and entertainment conglomerate is set to report full-year results and forecasts for the current financial year to March 2011 on Thursday.

For the year just ended, Sony expects an operating profit of 32bn yen (£229m) up from its previous estimate of a loss of 30bn yen.

This was partly due to a recovery at its cellphone joint venture with Sweden’s Ericsoon, saving itself from a second straight year of operating loss.

Sony trails Samsung in LCD TVs, and competes with Nintendo and Microsoft in video games. But analysts said Sony was falling behind rivals in sales growth.

“One thing that concerns me is that Sony seems to be missing its sales forecast for the year,” Mizuho Securities analyst Ryosuke Katsura said.

“We need to watch closely if Sony will be able to realize top-line growth as it enters the expansion phase from this year on.” Sony has seen its shares grow by 15 per cent in 2010. Rival Panasonic managed to beat both sales and profit forecasts with figures last week.

Sony’s operating profit forecast for the financial year

how far Sony’s shares have risen in 2010

Sony’s global workforce

the number of subsidiaries the company has worldwide

the number of stock exchanges where Sony has shares listed