TOKYO (Reuters) – Sony Corp stuck with its full-year profit forecast as a weaker yen and asset sales underpinned earnings, offsetting weaker demand for its televisions, game consoles and other devices.
Sony, which is doubling down on consumer electronics in a bid to revive the company, joined domestic rivals Sharp and Panasonic in reporting a quarterly operating profit, although analysts are skeptical the industry can regain its former status.
The maker of PlayStation games and Bravia TVs held its full-year operating profit forecast of 130 billion yen ($ 1.4 billion), compared with a consensus estimate of 119 billion yen of 19 analysts surveyed by Thomson Reuters I/B/E/S. Sony made a 67 billion yen operating loss in 2011/12.
“If this weak yen rate persists it should provide us with a big upside,” said Chief Financial Officer Masaru Kato.
In the three months to December 31, Sony posted 46.4 billion yen in operating profit compared with a 91.7 billion yen loss a year ago. The result came in below the average 72.1 billion yen profit estimated by six analysts.
Japanese firms, once key innovators in consumer electronics, have been overtaken by rivals such as Samsung Electronics and Apple Inc , and have lost out as consumers flock to smartphones and tablets.
Sony under its latest CEO, Kazuo Hirai, is focusing on mobile phones and tablets, cameras and gaming in a bid to return the company to profit. It is also expanding its medical devices through an investment in endoscope maker Olympus Corp .
Sony cut its November forecast for full-year sales of TV sets from 14.5 million to 13.5 million, but kept its prediction for an 11 percent decline in sales of its PlayStation games console to 16 million.
The company also pared its estimate for sales of compact cameras for the year to 15 million from an earlier estimate of 16 million. It was down from 21 million a year earlier.
It cut its estimate for PSP and PS Vita handheld devices to 7 million from a November estimate of 10 million.
ASSET SALES
Sony for now is boosting earnings through asset sales it books as operating profit. A rapid fall in the value of the yen against the dollar, and other currencies is also helping the company, which sells most of its products outside Japan. The yen weakened 11 percent against the U.S. dollar during the final three months of the year, and by 14 percent against the euro.
Hirai said in January that any assets not adding to core business, helping grow new businesses or aiding the turnaround of the TV unit could be sold.
Sony, which is also axing 10,000 jobs this business year, last month agreed to sell its U.S. headquarters building in New York City for $ 1.1 billion. It has also put one of its main buildings in central Tokyo up for sale in a deal that could raise a further $ 1.1 billion, sources have told Reuters.
The tech giant last year sold its chemical unit to a state-sponsored bank in Japan for $ 700 million, and is also mulling the sale of its battery business.
With its credit rating eroding, including a downgrade along with Panasonic, to below investment grade by Fitch last year, Sony faces higher borrowing costs.
Since the start of the year Sony’s shares have gained nearly 60 percent, rebounding from 30-year lows, compared with a 9 percent rise in the benchmark Nikkei 225 <.n225>. Its share rose 2.6 percent on Thursday to close at 1,519 yen before it released its results for the quarter. ($ 1 = 93.5450 Japanese yen)</.n225>
(Editing by Richard Pullin)
Business News Headlines – Yahoo! News
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Weaker yen helps keep Sony on course for profit target
