Sony cuts profit forecast and lowers sales outlook
SONY HAS slashed its forecast for 2012-13 operating profit and has lowered its sales expectations for key products, including its hand-held PSP and PS Vita devices, as new boss Kazuo Hirai battles to revive the fortunes of the electronics giant.
Sony said April-June operating profit fell a much steeper-than-expected 77 per cent to ¥6.28 billion compared with a year earlier, blaming a strong yen and weak economies. Analysts had pencilled in a 36 per cent fall.
Rival Sharp announced a ¥94 billion operating loss for the June quarter and plans its first job cuts in more than 60 years as Japan’s electronics industry scrambles to keep up with foreign competitors.
Sony shares hit a 32-year low in July on waning investor confidence it will be able to close the gap with the likes of Apple, Samsung Electronics and Microsoft.
“I think they’re in a pretty difficult position,” said Yuuki Sakurai, chief executive of of Fukoku Capital Management, the asset management unit of Japan’s Fukoku Mutual Life Insurance.
“If they don’t clearly show what is going to change under the new management I think the market will crush the stock again.”
In the latest sign of that struggle, Sony cut some projections for product sales for the year to March 2013.
The firm said it expected to shift 15.5 million TVs, down from a May projection of 17.5 million. It projected PSP and PS Vita hand-held device sales of 12 million, down from 16 million, but maintained a forecast of 16 million sales for the PlayStation games console.
Sony cut its 2012-13 operating profit forecast back to ¥130 billion from a previous forecast of ¥180 billion, moving more into line with market thinking.
Taking the helm at Sony in April, Mr Hirai vowed to revive the fortunes of the maker of the Walkman music player. The steady slide in Sony shares has left the Japanese firm with a market capitalisation of $12.4 billion, about a 15th of the size of Samsung.
After Sony returned a record net loss of ¥455 billion for the last fiscal year to March 31st, Mr Hirai promised 10,000 job cuts and big cost reductions in the TV unit that has produced losses amounting to about $12 billion in the past decade. – (Reuters)