Struggling Japanese electronics giant Sony Corp yesterday said it booked its first annual net profit in five years, offering a glimmer of hope for the former market leader.
However, Sony’s jump back into the black was largely due to fluctuations in the value of the yen and a string of asset sales — including unloading its Manhattan office building for more than US$1 billion — while its television and electronics business continues to struggle.
The firm’s chief financial officer, Masaru Kato, said years of losses at Sony had left management with one mission: “We were determined to report a profit not matter what.”
Earlier this month, the firm said dozens of senior executives, including chief executive Kazuo Hirai, who was appointed last year, would forego their annual bonuses to atone for a 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 the asset sales.
“Sony has taken some drastic streamlining measures under new management,” Nomura Securities analyst Shiro Mikoshiba said. “Now the focus is on whether it can generate more profits.”
Sony said the weaker yen boosted its results particularly in its film division, as demand for its digital cameras, video cameras and televisions remained weak, although Kato said yesterday that he expected the TV business to turn a profit in the current fiscal year.
Sony said it earned ￥43.03 billion (US$436.08 million) for the fiscal year to March, reversing a ￥456.66 billion loss a year earlier.
Sales in the period were ￥6.8 trillion, up 4.7 percent on-year, Sony said, adding that it expected to post a net profit of ￥50 billion in the current fiscal year to March next year on sales of ￥7.5 trillion.
Sony’s expected revenue in the current fiscal year was “primarily due to the depreciation of the yen and an increase in sales in the electronics businesses,” it said.
Sony’s makeover, which Hirai has described as “urgent,” also includes the sale of its chemical division and investing ￥50 billion in camera and medical equipment maker Olympus as part of a drive to tap the lucrative medical equipment market.