Sony Reports First Annual Profit Since 2008

The Tokyo-based electronics and entertainment giant said Thursday it had booked a net profit of ¥43.0 billion, or $458 million, in the financial year through March, compared with a loss of ¥456.7 billion a year earlier, making 2012 its first full year in the black since 2008.

Sales for the fiscal year grew 4.7 percent to ¥6.8 trillion, it said.

For the January-March quarter, Sony said net profit came to ¥93.9 billion, compared with a net loss of ¥255.2 billion in the same quarter the previous year. Sony said it expected profit to grow a further 16 percent in the current fiscal year, which ends in March 2014, to ¥50 billion.

To climb back to profit, Sony has done much streamlining, dissolving flat-panel television manufacturing ventures with Sharp and Samsung, shedding its chemical-products business and selling off its office buildings, including its New York headquarters on Madison Avenue for $1.1 billion.

A dramatic fall in the value of the yen, prompted by the economic policies of Prime Minister Shinzo Abe, is also helping Sony buttress its bottom line by increasing the value of its overseas earnings.

Now, Kazuo Hirai, who took over as chief executive in April 2102, faces the uphill task of reviving Sony’s storied electronics division. Once a consumer electronics powerhouse, Sony has in recent years been outshone by the likes of the design-savvy Apple, and outgunned by the marketing and manufacturing prowess of Asian rivals like Samsung.

But there are early signs of revival. After disentangling itself from an unproductive smartphone venture with Sweden’s Ericsson, Sony has scored a series of hits, including its snazzy Xperia Z smartphone, which went on sale in February to mostly rave reviews. Sony is also counting on the release of its next-generation video game console, the PlayStation 4, to spur holiday-season sales. And the company is still seeking to exploit the relationships between its hardware business and its vast catalog of games, music and films.

For now, investors are bullish on Sony’s prospects. Sony’s share price has doubled in the past six months, though it ended trading Thursday down 1.36 percent at ¥1,744, as investors locked in profits before the earnings release. Still, its shares remain valued at less than a third of the heights seen five years ago, underscoring just how far Sony has fallen, as well as the upside it now hopes to regain.

Article source: http://www.nytimes.com/2013/05/10/business/global/10iht-sony10.html?partner=rss&emc=rss