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Sony sees return to profit, aims to halve TV losses

posted 10 May 2012, 06:44 by Mpelembe   [ updated 10 May 2012, 06:44 ]

Sony Corp foresees a return to profit this year by concentrating on smartphones as it looks to halve the losses in its TV business.

TOKYO, JAPAN (MAY 10, 2012) (REUTERS) - Sony Corp on Thursday (May 10) said it expected to return to net profit this year thanks to a restructuring of its mainline electronics business.

Sony expects 30 billion yen (377 million US dollar) in net profit by next March after it bled a record 5.74 billion US dollars in the fiscal year which just ended . Its main push will be to forge ahead in the mobile phone business.

"We want to fully integrate Sony's technology and network services into the hardware. We also have movies and music and intend to utilize all these in Sony's smartphone business and get on a growth trajectory," said chief financial officer Masaru Kato.

The company said it expects to sell 33 million smartphones this year, 50 percent more than the last.

In preparation for that mobile push, Sony last year acquired Ericsson from a phone joint venture to integrate the business with its other consumer electronics units.

Under new CEO Kazuo Hirai, Sony is slashing costs - 10,000 jobs, or 6 percent of the global workforce, will go - in a bid to turn around its struggling TV unit.

At a briefing last month, Hirai sketched a future driven by mobile devices such as the Xperia smartphone, gaming and cameras, as well as medical devices and electric car batteries, along with big cost cuts in the TV business that has lost more than 12 billion US dollars in 9 years.

"We will increase our group profitability by further strengthening our movie, music and financial arms which are providing stable profits and improve profitability in our electronics division," chief financial officer Masaru Kato reiterated.

Hirai, who succeeded Welsh-born Howard Stringer last month, hopes to reduce Sony's TV costs after exiting a joint LCD panel venture with Samsung. The Japanese firm in December agreed to sell its 50 percent stake in the panel production firm that had locked it into buying expensive panels as a market glut triggered a drop in the price of the main TV component.

"We have changed our policy to not simply chasing the number of televisions we sell to increase profitability," said chief financial officer Masaru Kato.

Hirai has set a target for group sales of 8.5 trillion yen (106.85 billion US dollars) in two years, with an operating margin of more than 5 percent, but he has yet to spell out just how Sony will achieve those mid-term targets, and investors are concerned about Sony's prospects as consumers flock to gadgets made by Samsung and Apple.