Sony shows turnaround is no fluke

CEO Kazuo Hirai is showing the turnaround at Sony was no fluke. By Yuji Nakamura and Takako Taniguchi.

Sony CEO Kazuo Hirai

CEO Kazuo Hirai is showing the turnaround at Sony was no fluke.

The Tokyo-based company reported preliminary operating profit of ¥285bn (US$2,6bn; R34,3bn) for the fiscal year to March 2017, 19% higher than its previous forecast, according to a statement on Friday.

It said net income would be about ¥73bn, more than twice the previous forecast.

That marks the second straight year operating profit has topped $2bn, the longest such streak since 2001.

The company cited strong performance across most businesses and cost savings in its insurance unit. Its chips division also saw lower expenses after a faster-than-expected recovery from last year’s earthquake in western Japan.

“This will strengthen the market’s confidence going into the next fiscal year,” said Kazunori Ito, an analyst at Morningstar Investment Services.

“Despite the strengthening yen, the fact that chips were mentioned in this release means they probably contributed quite a lot to this upward revision.”

Sony, which plans to release final earnings on 28 April, left its revenue outlook unchanged at ¥7,6 trillion.

Shares trading in Germany rose 1,9% after the results, more than the 0,6% the stock rose in Tokyo prior to the announcement. Sony is up 9,7% so far this year through to Friday in Tokyo trading.  — (c) 2017 Bloomberg LP

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