Sony forecasts record profit as camera chips, TVs fuel recovery
Tokyo: Sony Corp. is prospering again.
The Tokyo-based electronics maker, which has staged a turnaround following a string of losses about a decade ago, increased its annual operating profit outlook to a record 630 billion yen ($5.6 billion) from 500 billion yen for the current fiscal year through March. The last time it reported figures close to that threshold was in 1998. Shares in German trading were up 2.3%.
Demand for high-end 4K televisions and wider use of camera chips helped to make up for slower growth in the PlayStation business and a lack of blockbuster films. The revenue forecast for the period was raised to 8.5 trillion yen from 8.3 trillion yen. Since taking charge in 2012, chief executive officer Kazuo Hirai restructured the company and invested in key divisions, helping to restore the company’s reputation as a manufacturer of high-quality electronics products.
“Hirai is indeed hitting full stride here,” said David Dai, an analyst at Sanford C. Bernstein & Co. “The 630 billion yen forecast is not a complete surprise as their previous guidance, 500 billion yen, was known to be overly conservative. But the raise shows management is now confident in meeting the higher target.”
In the latest quarter, Sony posted an operating profit of 204 billion yen, topping analyst projections for 139 billion yen in the period ended September, according to estimates compiled by Bloomberg. Net income was 131 billion yen, better than the prediction for 81 billion yen. A more favourable exchange rate also helped to fuel revenue, which topped estimates at 2.06 trillion yen.
“The profit rise is mainly attributed to a shift toward premium models like 4K TVs, and a better mix of products, and favourable foreign exchange movements,” chief financial officer Kenichi Yoshida told reporters after the results.
Sony has invested billions to develop state-of-the-art image sensors, a move that is beginning to pay off as smartphone makers embrace the use of multiple cameras to improve image quality and create augmented reality features.
Operating profit from chips rose to 49 billion yen during the quarter, compared with a loss of 4.2 billion yen a year ago, when the division was still recovering from damaging earthquakes in Kyushu. Revenue rose 18% to 228 billion yen.
Apple Inc., Xiaomi Corp. and other smartphone makers are outfitting their latest models with two cameras on the back of each device. This lets software compare two pictures to improve photo quality and gauge depth to perform basic AR functions.
“The biggest earnings driver is chips,” Masahiko Ishino, an analyst at Tokai Tokyo Securities, said prior to the results. “Dual cameras are becoming the norm in phones. As we enter a phase where 20, 30 or 40% of phones begin to carry dual cameras, we’re going to see that continue to lift Sony’s earnings into next year and the year after.”
Sony held 42% of the image sensor market as of last year, according to researcher Yole Developpement. Besides image sensors, it’s now investing in 3-D sensors that can detect their environment by calculating how long it takes for light to reflect off surfaces. Mass production is slated for next year, with the new chips set to be adopted by next-generation AR devices and self-driving cars. Bloomberg
- Air quality in Delhi today best in over a month: CPCB
- Zimbabweans celebrate Robert Mugabe’s imminent exit at mass rallies
- India’s Manushi Chhillar crowned Miss World 2017
- Farmers to participate in two-day protest in Delhi from Monday
- Gujarat elections: BJP issues second list, names candidates for Congress held seats