Sir Howard Stringer the CEO of struggling Japanese consumer electronics Company Sony believes that he is closer to turning the Company around after slashing 16,000 jobs, closing 8 factories and moving production of Sony branded products to third party manufacturers.
Senior executives from Sony, who is currently bleeding billions in losses, are hoping to save over $3.5 billion dollars via their cost cutting. In a briefing to journalists earlier today Stringer said that hopse to return to profitability by March 2013 and that Sony’s future lies in content, 3-D TV, gaming and Blu ray.
Stringer said that he expects to restore the Companies loss-making liquid crystal television business and video games operations to profit in the fiscal year ended March 2011, with a 20% market share the target for the 12 months ending March 2013.
However he failed to outline how he was going to compete against a surging Samsung and Apple, two Companies who are delivering record profits while taking market share away from Sony.
Earlier this week Sony raised its forecast because of “second-quarter results that exceeded expectations”. It said it expected to lose Australian dollar $1.4 Billion instead of the forecast $1.6 Billion.
In comparison Samsung made a profit of $3.5 Billion and Apple $1.9 billion in the last quarter.
The Financial Times in London reported that the performance of Sony’s core electronics business was mixed. The troubled TVs-to-cameras consumer division returned to operating profit in the quarter, earning a 1.1 per cent operating margin on sales down by 37 per cent on last year at Y800bn.
The operating loss in networked products, however, which includes Playstation video games and is supposed to deliver much of Sony’s future growth, increased to Y58.8bn as sales of the old Playstation 2 died away and Sony cut the price of its flagship PlayStation 3 to compete with rivals.
Also looking for a turnaround is Panasonic who yesterday announced that they had cut $2.5 Billion in costs and were now set to deliver a yearend profit of $1.4 Billion. Early in the year Panasonic had losses of over $5 Billion.