Japanese electronics giant Sony said yesterday it expects to return to profit in the current financial year on the back of tough restructuring measures and a pick-up in demand.
The maker of Bravia TVs, PlayStation game consoles and Cyber-shot cameras forecast a profit of ¥50 billion (US$535.5 million) in the year ending in March next year as it looks to aggressively launch 3D televisions and related products.
For the financial year just ended, the company reported an operating profit of ¥31.8 billion yen compared to a loss of ¥227.8 billion the previous year, which was its biggest ever. Sony announced its second consecutive annual loss of ¥40.8 billion for the past year, narrowing from a loss of ¥98.9 billion previously.
PHOTO: REUTERS
The electronics giant has been forced to undergo major restructuring — slashing 20,000 jobs, selling facilities and turning to suppliers for parts — after seeing losses pile up as the financial crisis hit demand.
However, the three months to March saw losses narrow to ¥56.6 billion from ¥165.1 billion a year earlier, indicating that major restructuring combined with a reviving market are steering Sony back towards health. Sony chief financial officer Nobuyuki Oneda told reporters that restructuring would continue this year, while the electronics giant forecast its TV, games and cell phone joint venture Sony Ericsson to return to profit.
Oneda said Sony hoped to sell about 25 million TV sets in the current year, an increase of around 10 million units from the previous year.
He said, however, that Sony was wary of the eurozone debt crisis, as Europe accounts for 25 percent of global sales. The company has had a difficult few years in the face of tough competition from rival products such as Apple’s iPod and Nintendo’s Wii. However, sales of its Playstation 3 console rose on-year and are expected to climb in the current financial year. Osamu Hirose, an analyst at Tokai Tokyo Research Centre, said Sony was on its way to a V-shaped recovery from its earlier slump.
“Sony is planning to start selling 3D televisions in June, which will be one of the factors helping the company regain its footing,” Hirose said.
In doing so the company will join rivals such as Sharp and Samsung Electronics in a sector the industry hopes will help revive profits, as strong competition and falling prices force a re-evaluation of the LCD business.
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