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  • Newport International Group: Japan’s Sony First-quarter Operating Profit Beats Forecasts

    Communication, Industrial Design

    Source: http://www.euronews.com/business-newswires/2054170-japans-sony-first-quarter-operating-profit-beats-forecasts/

    TOKYO (Reuters) – Sony Corp reported a higher than expected first-quarter operating profit on Thursday, boosted by strong sales of its flagship Xperia smartphones in Japan and rising shipments of image sensors to phone makers.

    The bump in profitability may not be enough to please activist shareholder Daniel Loeb, whose New York-based Third Point hedge fund is proposing Sony spin off as much as one-fifth of the group’s money-making entertainment arm – movies, TV and music.

    The maker of PlayStation game consoles and Bravia TVs logged an operating profit of 36.4 billion yen ($369.68 million) in the April-June quarter, topping the 25.3 billion yen April-June operating profit expected by four analysts surveyed by Thomson Reuters I/B/E/S. The company posted an operating profit of 6.3 billion yen in the same period last year.

    “While movies, music and the financial business are providing stable profits, the biggest challenge that we face is the rebirth of electronics and returning that division to profitability … With that in mind, I believe this result is adequate,” Chief Financial Officer Masaru Kato told reporters.

    Sony’s board is expected to reject Loeb’s proposals, the Nikkei newspaper said on Thursday, with directors arguing that the electronics company could compete better by maintaining ties with the entertainment arm of the business.

    Sony CEO Kazuo Hirai told shareholders last month the company’s board would carefully consider Third Point’s suggestions. Kato declined to comment further on Thursday, except to say: “This is a very important proposal and we will respond after thorough discussion”.

    In a letter to investors this week, Loeb praised Hirai’s efforts to stem the red ink in Sony’s electronics business by cutting overhead and streamlining its range of products.

    But Loeb, who owns around 7 percent of Sony through shares and cash-settled swaps, called the entertainment division poorly managed and repeated his earlier calls for Sony to bring more transparency and accountability to those divisions.

    “A resurgent Electronics combined with a well-managed, publicly listed Entertainment business would make for a stronger Sony and offer tremendous value for shareholders,” he said.

    Loeb is credited with forcing change at Yahoo Inc, where he waged an aggressive campaign to upend its previous management in 2011 and 2012, accusing then-CEO Scott Thompson of padding his resume with a non-existent computer science degree. Thompson was out within weeks.

    Sony kept its full-year operating profit outlook unchanged from its May forecast of 230 billion yen, compared with a 225.8 billion yen full-year operating profit expected by 21 analysts surveyed by Thomson Reuters I/B/E/S. It raised its full-year revenue forecast to 7.9 trillion yen from 7.5 trillion yen.

    The company’s TV business eked out 5.2 billion yen in operating profit in the first three months, the first time it has been in the black in 12 quarters. It did not announce sale targets for the PS4 video game console.

    Sony’s shares have more than doubled so far this year, buoyed by Third Point’s suggestions as well as Prime Minister Shinzo Abe’s potent mix of monetary and fiscal stimulus, which has fuelled a 33 percent rise on Tokyo’s benchmark Nikkei.

    The earnings announcement came after the end of share trade on Thursday. Sony ended up 1.7 percent at 2,104 yen, compared with a 2.5 percent rise in the Nikkei.

    (Reporting by Mari Saito; Editing by Edmund Klamann and Stephen Coates)

  • hi

    I have been meaning to see an article about the tech and I saw a lot here.

  • hey

    thanks for the update.. im very interested with this..

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Newport International Group: Japan’s Sony First-quarter Operating Profit Beats Forecasts

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