Sony Returns to Profit after Four Years of Losses

on May 9, 2013

Sony Corp. (TYO:6758) has returned to profit after four straight years in the red and sees net income rising further in the current fiscal year, albeit below analysts’ estimates.

The Japanese company posted on Thursday, May 9 net income of 43 billion yen (£280 million) for the fiscal year ended March 31, a sharp turnaround from the net loss of 456.7 billion yen for the previous year.
The company forecast net income of 50 billion yen for the fiscal year 2014 that started on April 1, 2013. Sony’s projection is lower than the 66.4 billion-yen average of 18 analyst estimates compiled by Bloomberg.

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The Sony share price closed 1.36 percent lower at 1,744 yen in Tokyo trading before the announcement.
**Full-year results**
Job cuts, sales of businesses, weaker yen and blockbuster films such as “The Amazing Spider-Man” have helped Sony swing to profit following four years of losses. The company has managed to bounce back from the worst loss in its history posted in the last fiscal year – a success which the company, just like Toyota on Wednesday, attributed in part to the weaker yen, the result of Prime Minister Shinzo Abe’s reforms aimed at energising Japan’s economy.

Restructuring of the business has also contributed for the turnaround. Last year, the company cut jobs and sold a number of assets, including its U.S. headquarters building on New York’s Madison Avenue and several buildings in Tokyo. Sony also sold its shares in Japanese game maker DeNA and ended its liquid-crystal display venture with rival Samsung.

**Revenue to Rise by 10 Percent in FY 2014**
Sony said on Thursday its revenue would rise by 10 percent to 7.5 trillion yen in the FY 2014. Operating profit would remain largely unchanged at 230 billion yen versus 230.1 billion yen a year earlier.
The company expects to see sales rising at some of its core businesses such as TV sets. Sony aims to sell 16 million TVs this year, compared with 13.5 million the previous year. Some analysts, however, doubt the company would be able to meet the forecast.

“I don’t know how Sony would be able to spur TV sales to 16 million,” said Makoto Kikuchi, chief executive officer at Myojo Asset Management Japan Co., has said, as quoted by Bloomberg. “Are there that many people buying TVs?”
Last year Sony’s TV unit recorded a loss of 69.6 billion yen, marking the ninth straight year without turning in profit for the business.
Another area where Sony expects its sales to rise is the smartphone business. The company expects smartphone sales to reach 42 million, a hefty increase as compared with the 33 million sales in the previous year.
**PlayStation 4**
!m[The Company Sees Profit Rising Further in FY 2014](/uploads/story/2172/thumbs/pic1_inline.png)
Sony is expected to launch later in 2013 its new game console – the Playstation 4 – which is likely to give a significant boost to sales at Sony’s game division. The console will succeed the company’s previous offering – the PlayStation 3 – which had sold about 77 million units between late 2006, when it was launched, and January 2013, according to IDC data.
Sony takes a percentage of every game copy sold on its consoles by third parties.
**The Sony share price was JPY 1,744.00 as of 12.23 GMT, 09.05.2013**


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