Sony Cracks A Profit As Sales Of TV's & Gaming Gear Slide

Written by David Richards     10/05/2013 | 10:45 | Category: GAMING

Sony, which has not made a profit for five years, has finally managed to string one together with a big contributor being the sale of their New York office building for $988 million, a reduction in their head count by 11% and the sale of their share in online medical-service provider M3, consumer electronics and gaming is still struggling.

Sony Cracks A Profit As Sales Of TV
The Japanese company claims that they will deliver a 16% rise in net profit for its current fiscal year, due to the pending release of a new Playstation 4 gaming console and an expansion in the company's smartphone business.

"We still have a long way to go and we can't be puffing our chests out. But we do see it as a year of results and progress," Mr. Kato said at a news conference last night. "We expect this to carry on."

The big problem for Sony is that the company's core electronics business continues to deteriorate. During the past 12 months the Japanese company has scaled back sales of TV sets to limit manufacturing losses, and demand for digital cameras and personal computers is falling quickly. 

In Australia the company has lost share in the TV market and has been forced to quit their Sony stores in favour of new kiosks in shopping centres. 

Sony posted net profit of $948.4 million in its fiscal fourth quarter, compared with a loss of ?255.21 billion a year earlier. The Japanese company swung to an operating profit of ?147.15 billion. The figures, which exceeded analysts' expectations, propelled Sony to an annual net profit of ?43 billion.

Fourth-quarter revenue rose 8.3% to ?1.733 trillion.

Company executives claim that they can get their TV business profitable this fiscal year, following nine straight years of losses. 

The operation recorded an operating loss of ?69.6 billion in the latest fiscal year. Sony targeted a 40% increase in revenue from TVs and for sales to rise to 16 million units from 13.5 million last year.

"To turn the electronics segment profitable somehow is our biggest issue," said Mr. Kato, the Finance Chief. "The market environment and competitive landscape remains severe in the electronics business."

Sony returned a profit at its video games unit last year and forecast that the unit's profit would be flat this year. That is an ambitious goal, since the PlayStation 3 loaded Sony with billions of dollars in initial losses before the company started to reap the console's rewards.

Sony said the PS4 doesn't require the same level of investment and that all production will be done by contract manufacturers. "The PS4 carries a much lighter business model compared with the PS3," Mr. Kato said.

Forecasting a 27% increase in smartphone unit sales, Sony said it would turn its mobile-products division profitable this fiscal year. The division posted a ?97.2 billion loss in the past year. Sony took additional restructuring measures at the division after it bought out its joint-venture partner Ericsson.