Thu, Nov 02, 2017 - Page 10 News List

Sony hits decade high with blowout quarter

STRONG OUTLOOK:With dual cameras becoming the norm in smartphones, analysts expect earnings from camera chips to be the firm’s biggest driver

Bloomberg

Sony Corp’s new robotic dogs, which the company is marketing as “aibo” instead of their predecessors “Aibo,” are displayed at a news conference in Tokyo, Japan, yesterday. The new version features new actuator technology that allows the robots to move more naturally.

Photo: Bloomberg

Sony Corp is prospering again. Shares climbed 11 percent to their highest since 2008, after the company increased its annual operating profit outlook to a record ¥630 billion (US$5.6 billion). That exceeded the ¥591 billion average that analysts were projecting.

Demand for high-end 4K televisions and wider use of camera chips helped to make up for slower growth in the PlayStation business and a lack of blockbuster films.

The revenue forecast for the period was raised to ¥8.5 trillion from ¥8.3 trillion.

Since taking charge in 2012, chief executive officer Kazuo Hirai has restructured the Tokyo-based company and invested in key divisions, helping to restore the company’s reputation as a manufacturer of high-quality electronics products.

In the September quarter, Sony posted an operating profit of ¥204 billion, topping analyst projections for ¥139 billion in the period, according to estimates compiled by Bloomberg.

Net income was ¥131 billion, better than the prediction for ¥81 billion. A more favorable exchange rate also helped to fuel revenue, which topped estimates at ¥2.06 trillion.

Sony has invested billions to develop state-of-the-art image sensors, a move that is beginning to pay off as smartphone makers embrace the use of multiple cameras to improve image quality and create augmented reality (AR) features.

Operating profit from chips rose to ¥49 billion during the quarter, compared with a loss of ¥4.2 billion a year ago, when the division was still recovering from damaging earthquakes in Kyushu. Revenue rose 18 percent to ¥228 billion.

Apple Inc, Xiaomi Corp and other smartphone makers are outfitting their latest models with two cameras on the back of each device. This lets software compare two pictures to improve photograph quality and gauge depth to perform basic AR functions.

“The biggest earnings driver is chips,” Masahiko Ishino, an analyst at Tokai Tokyo Securities, said prior to the results. “Dual cameras are becoming the norm in phones. As we enter a phase where 20, 30 or 40 percent of phones begin to carry dual cameras, we’re going to see that continue to lift Sony’s earnings into next year and the year after.”

Sony held 42 percent of the image sensor market as of last year, according to research firm Yole Developpement.

Besides image sensors, it is now investing in 3D sensors that can detect their environment by calculating how long it takes for light to reflect off surfaces.

Mass production is slated for next year, with the new chips set to be adopted by next-generation AR devices and self-driving cars.

Sony boosted its operating profit forecast in consumer electronics to ¥76 billion from ¥58 billion, driven by stronger sales of televisions.

Sony has positioned itself as a provider of high-end 4K TVs, and consumers are showing they are willing to pay more for a premium experience. It cited lower component prices for the profit revision.

In games, operating profit during the quarter rose to ¥55 billion from ¥19 billion a year ago. Revenue rose 35 percent to ¥433 billion.

PS4 sales accelerated to 4.2 million units in the quarter, up from 3.9 million from the previous year. Sony increased the forecast for unit shipments this year to 19 million from 18 million.

In music, the success of the smartphone game Fate/Grand Order was notable. The title was the main catalyst for the rise in the unit’s full-year operating profit forecast to ¥94 billion from ¥75 billion.

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