Sony Forecasts FY Profit Jump, Operating Income To Quadruple

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Sony expects its operating income will more than quadruple in the 2016 fiscal year, however analysts believe the target is conservative.Sony, which today released its financial results for the 2015 fiscal year, expects operating income will jump to 320 billion yen (around $3.39 billion) in 2016, up from the 68.5 billion yen it posted in 2015.

However, its forecast has fallen short of analysts’ expectations: by comparison, analyst estimates compiled by Bloomberg came to an average of 401.6 billion yen.

“The target of operating profit is conservative,” Bloomberg reported Hideki Yasuda, an analyst at Ace Research Institute, as stating. “Investors expected too much so Sony is trying to lower their expectations.”

Sony has forecast sales and revenue of 7.9 trillion yen for the upcoming year, sliding from 8.22 trillion yen in 2015, and net income of 140 billion yen, a turnaround of 266 billion yen from 2015’s loss of 126 billion yen.

Among its various business divisions, Sony has forecast its devices segment will deliver 16.5 per cent growth, with overall sales expected to increase primarily due to a significant increase in sales of image sensors. Its pictures division is also expected to deliver growth of 16.1 per cent.

Sony expects its game and network services sales to remain essentially flat year-on-year.

“Operating income is expected to decrease year-on-year, primarily due to the impact of a decrease in PS3 platform sales and the negative impact of foreign exchange rates, partially offset by the impact of an increase in PS4 platform sales,” Sony stated.

Meanwhile, Sony expects its mobile communications division to decline 7.1 per cent, with its operating loss expected to decrease year-on-year from 217.6 billion yen to 39 billion yen.

“Sales are expected to decrease year-on-year due to a reduction in mid-range smartphone unit sales in an effort to improve the profit structure of the segment,” Sony stated.

“Operating loss is expected to decrease year-on-year, primarily due to the absence of the 176.0 billion yen impairment of goodwill recorded in the fiscal year ended March 31, 2015, an improvement in product mix, and a decrease in costs due to the benefit of restructuring.”

Earlier in the year, Sony unveiled its “mid-term strategy” for the next three years, aiming for a consolidated operating profit of more than 500 billion yen in the 2017 financial year, stating it would position its devices, game and network services, pictures, and music segments to drive profit growth.

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