Weaker Yen Helps Sony Trim Losses for Quarter

Share with others:


Print Email Read Later

TOKYO -- Sony pared losses in the last quarter of 2012 and stood by an upbeat profit forecast for its full financial year Thursday, thanks to a weak yen that helped compensate for disappointing sales of its cameras, flat-panel televisions and video game consoles.

The Japanese electronics and entertainment company booked a loss of ¥10.7 billion, or $114 million, in the three months that ended in December, its financial third quarter, compared with a ¥158 billion loss in the same period the previous year. The weak currency helped lift sales 7 percent to ¥1.95 trillion, even though Sony shipped fewer products.

Citing slower demand overseas -- and underscoring continued weaknesses in its business -- Sony said it expected to sell fewer cameras, televisions and game consoles for the financial year that ends in March than it had previously forecast. But its TV business, which has lost money for almost a decade, is closer to climbing back to profitability, it said.

Sony said it expected to return to an overall profit for its full financial year for the first time in four years, with ¥20 billion in net profit on sales of ¥6.6 trillion.

The earnings at Sony reflect a revival in the fortunes of other struggling Japanese electronics manufacturers. Months ago, Sony and its rivals Panasonic and Sharp were all but written off by analysts as hopelessly unprofitable and lacking innovation.

But with the yen having declined significantly in recent months, Japan's exporters are getting a much-needed lift. A weak yen helps inflate the exporters' profits by increasing the value of overseas earnings when they are converted into the home currency.

Sony shares, which had languished at record lows, have surged almost 60 percent in 2013, compared with a 10 percent rise in the Nikkei 225-share index. Over the same period, the yen weakened by 7.5 percent against the dollar. Sony stock closed Thursday at ¥1,519, up 2.6 percent.

It is unclear whether Sony's stronger financial standing will help it regain the technological edge that once defined the company. Sony, which makes the Walkman and the PlayStation, still has plenty of smart ideas but has struggled to execute them.

Sony released its e-readers ahead of others, for example, but a jumbled content strategy marred their success. Sony has also failed to integrate its vast catalog of films and music with its devices.

But Sony investors are now looking to the fourth-generation PlayStation home video game console, which could be announced this month, for the company's next hit. The Sony chief executive, Kazuo Hirai, who took charge nine months ago, has made video games a pillar of Sony's comeback, together with smartphones and cameras.

Sony has also stepped up its belt-tightening. It is cutting 10,000 jobs this financial year and agreed to sell its U.S. headquarters in New York for $1.1 billion. Sony also sold off its chemical unit for $700 million and might also sell its battery business.

"We are still in the middle of restructuring our business, but we are starting to see some results," the company's chief financial officer, Masaru Kato, said at a news conference.

Sony's improved outlook came after another Japanese electronics maker, Panasonic, said last week it had booked a ¥61.4 billion profit for the October-December period, compared with a ¥197.6 billion loss a year earlier. Panasonic, which makes Viera TVs and Lumix digital cameras, said cost cuts and a weaker yen had helped offset falling TV sales.

Sharp, the maker of Aquos TVs and an Apple supplier, reported a smaller loss for that quarter of ¥36.7 billion, compared with its ¥173.6 billion loss a year earlier.

But both Panasonic and Sharp still forecast substantial annual losses for the financial year ending in March. Panasonic expects to lose ¥765 billion, while Sharp expects a ¥450 billion loss.

interact

This article originally appeared in The New York Times.


You have 2 remaining free articles this month

Try unlimited digital access

If you are an existing subscriber,
link your account for free access. Start here

You’ve reached the limit of free articles this month.

To continue unlimited reading

If you are an existing subscriber,
link your account for free access. Start here