Sony posts first net profit in five years in restructuring push

AFP-JIJI, Bloomberg

Struggling electronics giant Sony on Thursday said it booked its first annual net profit in five years, offering a glimmer of hope for the once-iconic firm.

Sony said it earned ¥43.03 billion for the fiscal year to March, reversing a whopping loss of ¥456.66 billion a year earlier, as one-time asset sales lifted its bottom line and a sharply weaker yen helped boost Japanese exporters’ competitiveness and inflated the value of their foreign income.

Sales in the period were ¥6.8 trillion, up 4.7 percent year on year, Sony said, adding that it expects to post a net profit of ¥50 billion in the current fiscal year to March 2014 on sales of ¥7.5 trillion.

Earlier this month, the firm said dozens of senior executives — including chief Kazuo Hirai — would forgo their annual bonuses to atone for the ongoing slump in Sony’s electronics unit.

The decision came after the maker of PlayStation game consoles and Bravia televisions launched a massive corporate overhaul to stem losses, including thousands of job cuts and a string of asset sales, including office buildings in Manhattan and Tokyo.

The company generated about $2 billion in one-time gains by asset selloffs, which also included a chemicals unit and shares in health care data provider M3 Inc.

“Structural reform will continue to be a management issue at Sony amid falling demand for its core consumer-electronics goods such as TVs, compact cameras, camcorders and game consoles,” Kota Ezawa, an analyst at Citigroup Inc., said before the announcement.

Sony aims to revive its electronics business by focusing on games, cameras and mobile devices, including the flagship Xperia Z smartphone revealed at January’s Consumer Electronics Show in Las Vegas.

In February, Sony gave a preview of the PlayStation 4 video game console, which will go on sale for the yearend holiday season. Its first home-gaming machine in seven years will make its debut amid an industry shift toward games played on smartphones and tablets.

Nintendo Co., which released its new Wii U console in November, said last month it sold 3.45 million of the product, falling short of the 4 million target set in January. Microsoft may introduce the successor to its Xbox 360 at a “special unveiling” event May 21 at the company’s headquarters in Washington.

The electronics sector has been struggling with myriad problems ranging from slowing demand in key export markets, fierce competition from foreign rivals amid a strong yen, and strategic mistakes that left its finances in ruins.

  • Kelly farrel

    I’m glad that Sony made restructuring, but it’s loosing the opportunity to multiply sales – for example in Eastern Europe. Sony was the most popular and recognizable brand in post-soviet countries – everyone knows Sony in 1990’s, many people buying the TV’s and VHS-players, but after 2000’s the Sony lost it’s marketplace by unknown reasons – this market in post-soviet countries was taken by korean electronics companies – LG, Samsung. The Samsung is the king of the market in post-soviet countries now, but many people haven’t forgotten the Sony – it’s still have the chance to return into this big market on the West from Japan, only it’s need some special tactics to beat the korean competitors.