Sony aims to regain sales from Samsung

FMCG SUPPLIER NEWS

IOL Business/ Bloomberg - May 13th, 10:40

Sony forecast annual profit that missed analysts’ estimates on Friday as chief executive Kazuo Hirai rolls out new Xperia smartphones and Bravia televisions to recapture market share lost to Samsung Electronics. 

Net income might rise by 16 percent to ¥50 billion (R4.5bn) in the year started April 1, Sony said. That compares with the ¥66.4bn average of 18 analyst estimates.

Hirai used job cuts, asset sales, a weaker yen and blockbuster movies to return the company to profit after four years of losses as the electronics business struggles to keep consumers from migrating to Samsung products. Samsung’s smartphones outsold Sony’s seven to one last year, and its flat-panel televisions generated more than triple that earned by Sony’s television sales.

“Sony is being bullish,” Okasan Securities strategist Takashi Oba said. “It’s up to whether it can reduce the losses in its electronics business and produce hit products.”

Sony posted a profit in the year to March after it earned about $2bn (R18bn) in one-time gains selling stock holdings and properties including its New York headquarters, a chemicals unit and shares in health-care data provider M3. Sony’s movie studio topped the US box-office last year with hits including Skyfall and The Amazing Spider-Man.

Net income last fiscal year was ¥43bn, the company said last week. Operating profit might rise to ¥230bn, Sony said, compared with the ¥208bn average of analyst estimates. Sales would increase 10 percent to ¥7.5 trillion.

“We’ve improved our cost structure and are able to pursue volume growth,” chief financial officer Masaru Kato said.

The television business, the world’s third-largest, was unprofitable for a ninth year in a row, with a loss of ¥69.6bn, excluding charges, amid sluggish demand and competition from Samsung and LG Electronics.

Sony’s share of revenue in the flat-panel television market fell to 7.8 percent compared with 27.7 percent for Samsung.

Sony expects to sell 16 million televisions this fiscal year, up from 13.5 million. The company reiterated its target for the television unit to post a profit this year after racking up ¥800bn in losses since 2004.

Hirai’s plan to revive the consumer-electronics business focuses on games, cameras and mobile devices.