Sony is hopeful of recovery yet bottom line hit
SONY plunged to a record loss of ¥ 457bn (£3.53bn) in the last financial year, as its TV arm and a strong yen hammered its bottom line.
But the firm yesterday forecast a net profit of ¥ 30m for the coming financial year, hopeful that its cost cutting plans and a turnaround in its TV division will pay off quickly.
Under new chief executive Kazuo Hirai, Sony is slashing costs – 10,000 jobs, or six per cent of the global workforce, will go – in a bid to revive the firm’s profits.
The company said yesterday it expects to sell more than 33m smartphones this year, up from 22.5m last year.
In preparation for that mobile push, Sony last year bought out Ericsson from a phone joint venture to integrate the business with its other consumer electronics units.
Sony expects an operating profit of ¥ 180bn in the year to next March, slightly ahead of market estimates, but a rebound from the ¥ 67.3bn loss in the year just ended.
“The operating profit forecast isn’t far off the level seen two years ago … This suggests we’re on a recovery trend and last year was definitely the bottom,” said Kenichi Hirano at Tachibana Securities in Tokyo.
“But I think not everyone in the market is convinced of this, especially since the company lacks a solid plan to turn around its TV business.”
Sony predicted sales of its liquid crystal TVs would fall 11 per cent to 17.5m in the current year, but forecast its losses from the LCD TV business would halve to ¥ 80bn.
Sony also expects an 11 per cent decline in sales this year of its PlayStation games console to around 16m, it forecast yesterday. Sales of its new Vita handheld games console hit 1.8m in the previous year, Sony said.