Sony Posts $1.1 Billion Net Loss, Expects Profit in Current Year

Sony said Thursday it booked a $1.1 billion loss for its latest fiscal year, but the struggling electronics giant expects a profit in the next 12 months as it embarks on an overhaul.

The latest loss for Sony comes as the once world-leading firm continues with a painful restructuring that has included layoffs and asset sales, as it races to rescue its battered balance sheet.

Boss Kazuo Hirai, a company veteran tapped to turn the firm around, has said he would keep splitting the business into self-operating units in a bid to return to profitability.

Sony said its net loss for the year to March was JPY126 billion ($1.1 billion, roughly Rs. 6,990 crores), a slight improvement on the JPY 128.4 billion loss a year ago, as it absorbs big restructuring costs.

It was also much lower than the JPY 170 billion forecast by the company in February, which was itself a reduction from it earlier JPY 230 billion estimated shortfall.

On Thursday, the electronics-entertainment conglomerate posted an operating profit of JPY 68.5 billion, more than double the previous year, on sales of JPY 8.21 trillion, a 5.8 percent increase.

Strong sales of the PlayStation 4 games console and electronic devices, including image sensors used in cameras, helped drive revenue, while a weaker yen which lifts the value of repatriated overseas income also boosted results, it said.

Sony said a long-suffering television unit was showing signs of improvement.

"This improvement was primarily due to cost reductions and an improvement in product mix reflecting a shift to high value-added models," it said in a statement.

'Recovery path'
Critics have called on Sony to dump televisions altogether but Hirai flatly refused, saying they were an integral part of the company.

Sony has struggled in the consumer electronics business that built its global brand, including losing billions of dollars in televisions over the past decade as it faced fierce competition from lower-cost rivals in South Korea and Taiwan.

However, Hirai did move the firm out of the laptop sector and cut down its smartphone division, turning the focus to a stronger games and entertainment business including its Hollywood movie studio and music label.

The company also has a lesser-known, but profitable financial services division.

"Sony is shoring up its TV production business, which has contributed to its overall recovery," said SMBC Nikko Securities analyst Koji Kamichika.

"Its strong sectors imaging sensors and the videogames business have turned out to be profit drivers. Going forward, we think Sony is now on a recovery path and the downside risks are shrinking."

For the current fiscal year to March 2016, Sony expects a net profit of 140 billion yen and an operating profit of JPY 320 billion, although sales would be JPY 7.9 trillion, down 3.8 percent.

That upbeat estimate comes after rival Panasonic said Tuesday that its annual profit soared 49 percent, owing to strong results at its auto parts unit and lower costs linked to a sweeping restructuring.

Aquos-brand maker Sharp, which reports its results in mid-May, has struggled to fix its balance sheet and is reportedly in talks with its key lenders for aid, as it eyes the closure of loss-making units.