Sony's quarterly net loss narrows sharply

Stories You Might Like

• What the market indicators are telling us now
• Boehner blasts Obama sequester delay plan
• AMR, US Airways near merger deal: WSJ

0 Comments

Share

new

Feb. 7, 2013, 1:39 a.m. EST

 

 www.marketwatch.com/story/sonys-quarterly-net-loss-narrows-sharply-2013-02-07?siteid=bigcharts&dist=bigcharts

 

Portfolio Relevance

LEARN MORE

By Daisuke Wakabayashi

TOKYO--Sony Corp. said Thursday its net loss narrowed sharply in the quarter ended Dec. 31 as the Japanese electronics giant made progress in turning around its troubled TV business and continued to benefit from steady profits at its financial arm.

Sony reported a net loss of 10.8 billion yen ($115.65 million), in the three months ended December. That compared with a Y159 billion loss in the year-ago period, when the company incurred losses stemming from unwinding a series of joint ventures for mobile phones and liquid crystal displays.

But Sony said it bounced back from last year's losses on an operating basis to post a profit of Y46.4 billion, below an estimate of a Y72.13 billion from analysts polled by Thomson Reuters. Revenue rose 6.9% to Y1.948 trillion.

Optimism about its turnaround and the yen's weakening has lit a fire under Sony's shares. The weak yen is expected to lift Sony's earnings in Europe. Each one-yen slide against the euro helps Sony's annual operating profit by Y6 billion. Since its last quarterly earnings announcement Nov. 1, Sony shares are up more than 60%.

Sony's return to profit comes on the heels of better-than-expected earnings last week from Panasonic Corp. (6752.TO) and Sharp Corp. (6753.TO). While the sector remains in a challenging state, the improving results offer hope that Japan's electronics giants will avoid the worst-case scenarios that seemed possible even last year.

Like Japan's other consumer electronics firms, Sony is clawing back from several years of record losses with aggressive restructuring. For Sony, that means fixing the issues plaguing its television operations. Sony has said it is ahead of schedule with its plan to return the business to profit in the coming fiscal year starting in April.

For the full year to March, Sony kept the profit outlook it made in November. It expects a net profit of Y20 billion, an operating profit of Y130 billion and revenue of Y6.6 trillion.

One element of Chief Executive Kazuo Hirai's plan to halt the losses from selling televisions is to buy its liquid crystal display panels--which account for the bulk of TV production costs--from the open market, where supply is ample and prices fall steadily. With that strategy in place, the company dissolved capital-intensive LCD panel joint ventures with competitors Samsung Electronics Co. (005930.SE) and Sharp.

Less than a year on the job, Mr. Hirai has spent the bulk of his tenure focused on streamlining and reorganizing the company. But a major test of his leadership will come when a wave of new products hit the market over the next year, challenging whether the former head of Sony's videogame business can spur growth in addition to cutting costs.

Sony's newest flagship smartphone, the Xperia Z, will go on sale in Japan on Saturday, testing whether the company can offer consumers an appealing alternative to Samsung's Galaxy and Apple Inc.'s (AAPL) iPhone.

Also, Sony is planning to release a successor to its PlayStation 3 videogame console later this year, people familiar with the matter said.

Write to Daisuke Wakabayashi at daisuke.wakabayashi@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires