Roger Fingas
Based in large part on strong sales of camera sensors for products like Apple's iPhone, Sony is forecasting that its operating profits will more than quadruple in the coming year, a report said on Thursday.
While the Japanese electronics company recorded operating profits of 68.5 billion yen ($573.5 million) for its 2015 fiscal year — which ended in March — it's projecting a 2016 target of 320 billion yen, or approximately $2.7 billion, according to Reuters. That would be Sony's best operating profit in seven years, though still below analyst consensus, which is calling for an even higher profit of 408 billion yen ($3.4 billion).
CEO Kazuo Hirai has undertaken radical steps to help Sony recover from serious losses in the past several years. It has for since sold off its VAIO PC division, and spun off its TV business. Its audio and video businesses will also soon be spun off.
Sony is believed to be primarily responsible for the CMOS camera sensors in the iPhone 6 and 6 Plus. Based on large sales of those devices, the company has already twice announced plans to expand CMOS production. In the March quarter alone, Apple sold 61.17 million iPhones.
Sony's own mobile communications division is continuing to see losses. It took a 217.6 billion yen ($1.8 billion) hit in 2014, and is only predicted to shrink that figure to 39 billion yen ($326.2 million) this year. Although its current Xperia smartphones are liked by many critics, they continue to live in the shadow of products from Apple, Samsung, Motorola, and others.
The company is lastly projecting that while revenue will dip 3.8 percent in 2015, lower restructuring costs will help it turn a net profit of 140 billion yen ($1.2 billion), and resume paying dividends that were cancelled for 2014.
Amber Neely
Malcolm Owen
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21 Comments
Sony has good shareholders. They want the company to invest in new products and future markets.
1. I wasn't even aware that Sony made/sold a smartphone product.
2. When you're in the shadow of the Empire State Building, the shadow cast by the newsstand across the street is irrelevant. ;)
Didn't know they spun off their TV division. If there's one thing Sony was known for over the years it's their TVs. And now they're spinning off audio and video? What's left?
Didn't know they spun off their TV division. If there's one thing Sony was known for over the years it's their TVs. And now they're spinning off audio and video? What's left?
Actually, I believe the article is wrong. Sony has not yet spun off their TV business. It's been something talked about but I don't think it has happened yet. And yes, they consider the TV business separately than the A/V business for whatever reason. Probably has something to do with their Pro side.
Didn't know they spun off their TV division. If there's one thing Sony was known for over the years it's their TVs. And now they're spinning off audio and video? What's left?
Actually, I believe the article is wrong. Sony has not yet spun off their TV business. It's been something talked about but I don't think it has happened yet. And yes, they consider the TV business separately than the A/V business for whatever reason. Probably has something to do with their Pro side.
Yes, they have spun-off the TV business and they're going to spin off the A/V business, but these new divisions are wholly owned by Sony. The supposed idea was to give these businesses the freedom to operate without all of Sony's bureaucracy but also to make them completely responsible for their own P&L. And I think it's a game because since these businesses have been losing money for years, their losses will no longer reflect on the parent's balance sheet, which I think is how Sony started being profitable after losing money for many years.
My bet is that if these divisions actually start making money, they'll eventually be rolled back into Sony. If they don't, they'll be closed or sold-off.
My personal opinion is that Sony got much too large, they never developed the promised synergy between different divisions and they produced way too many products and many of those products were junk. It was actually quite shocking to see in the Sony outlet stores how many low-end crappy products they produce. Do they really need to produce 200 different low-end clock radios? They pushed 3D TVs when they became popular, but then they never had the better models of 3D glasses in stock. Same for specially designed TV stands.
I think if Sony streamlines the business, they can do well, but it would wind up a much smaller company. I think the markets would like Sony to dump manufacturing completely, although that would be a shame IMO. Their higher-end stuff isn't bad, but that's not where you can achieve mass-market numbers. In TVs, they've basically decided they can't compete on the low end, although somewhat surprisingly, there are no OLED sets yet in their current product line, although most of the line is now UHD (4K).