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Reuters

Sony Corp does not expect to make money on smartphones this year because of weak demand, but the company says restructuring will help it turn a profit in its loss-making consumer electronics division for the first time in four years.
Sony's April-June operating profit doubled, boosted by its games and networks division and a one-off asset sale, but it cut its smartphone sales target for this financial year by 14 per cent.
Analysts had said the initial target was too ambitious amid stiff competition from high-end rivals such as Apple and cheaper Asian electronics makers.
Chief financial officer Kenichiro Yoshida said the company was reviewing its mid-term strategy for smartphones as it would be expecting to just break even in the business this year, down from a previous operating profit forecast of 26 billion yen (HK$1.9 billion).
"We are also discussing whether to change the number of phones in our line-up and adjust their lifecycle," Yoshida said.
Sony has vowed to turn a profit on its flagship electronics division this year.
The company is cutting 5,000 jobs and spinning off its television division into a separate company, a move chief executive Kazuo Hirai has said will increase accountability at the business.
In the first quarter ended June, Sony's operating profit climbed to 69.8 billion yen from 35.5 billion yen a year earlier. Sony said a 14.8 billion yen gain from the sale of a technology centre in Japan inflated the profit, while its games and networks division - the focus of much of its corporate strategy going forward - turned in a strong performance.
Sony, with the smartphone business under review, maintained its full-year forecast of a 140 billion yen operating profit and a 50 billion yen net loss - which would be the firm's second consecutive year in the red.
"We have topped our targets [in the first quarter], but if you look at our past, we have made our targets in most first quarters but then haven't been able to meet our full-year targets," Yoshida said.
Sony also said it would set up a joint venture with Panasonic Corp and Japan Display to develop organic light-emitting diode displays, with the government-backed Innovation Network Corp of Japan taking a majority stake.


Sony rules out profit from smartphones

Kenichiro Yoshida, Sony's chief financial officer. Photo: AFP

Business

Companies

Japanese electronics giant sees sharp rise in operating profit from games and asset sale


Sony Corp does not expect to make money on smartphones this year because of weak demand, but the company says restructuring will help it turn a profit in its loss-making consumer electronics division for the first time in four years.
