Sony Forecasts Annual Profit below Analysts’ Estimates
Japanese consumer electronics maker Sony Corp said that it has predicted annual profit below the estimates of analysts. It is expected that operating income will increase more than fourfold to 320 billion yen in the year started April 1.
Chief Executive Officer Kazuo Hirai aims at decreasing costs and concentrating on profitability of the electronics major. The forecast for present year involves 35 billion yen in restructuring charges. Sony shares dropped 1.3% to 3,645 yen in Tokyo before the earnings were announced. The stock has rose 47% this year compared to 13% gain for the benchmark Topix index.
According to the company, the sales will be 7.9 trillion yen this year. It is also expected that net income will reach 140 billion yen. Analysts anticipated revenue of 8.2 trillion yen and profit of 189.9 billion yen. The company is anticipating a 17% increase in devices, the unit that created image sensors, and a 16% increase in the pictures division.
Hideki Yasuda, an analyst at Ace Research Institute said investors anticipated too much so the company is making an effort to lower their expectations. The earnings recovery comes when Hirai sold Sony's personal-computer business and reduced its smartphone lineup and placed the TV manufacturing business into a separate structure. Hirai took these steps to increase performance after years of losses. To tap biggest game market of the world, it began selling the PlayStation 4 console in China.
In February, Hirai predicted that operating profit of Sony will increase to 500 billion yen in the year ending March 2018. The company also expected a 40 billion-yen operating profit in the games division
"Sony has a history of falling short of its forecast, so the forecast this time is likely to err on the safe side to avoid another downward revision", said Mika Nishimura, an analyst at Mitsubishi UFJ Morgan Stanley Securities Co.