Sony Doubles Full-Year Profit Forecast to $400 Million
TOKYO – Sony raised its prediction on Thursday for net income in the year to March 31 from $200 million (20 billion yen) to $400 million, thanks to the weakening of the yen, asset disposals and the rise of the Japanese stock market.
Sales for the 12 months to March look to have risen 4.7 percent over last year, to $68.6 billion (6.8 trillion yen), up from the February forecast of $66.6 billion (6.6 trillion yen).
As well as increasing the value of overseas sales, the weaker yen will boost income from the $1.1 billion sale of Sony’s New York building when it repatriates that money back to Japan.
Sony also has a large and profitable life insurance operation in Japan, which has benefited from the steep rise in prices on the Tokyo Stock Exchange this year.
While the returning to the black after four years of losses will reflect well on Kaz Hirai, who took over as CEO from Howard Stringer last April, much of the health of the balance sheet is down to asset sales and favorable currency fluctuations. The current financial year will likely prove a sterner test, when it becomes apparent if his streamlining of the company’s operations translates into better products.
Yesterday Nintendo, a major rival to Sony in the video game sector, announced its annual results, with a return to profit also largely due to the weaker yen.
Sony stock has doubled in value over the last six months, after years of decline.
The official earnings announcement will be made on May 9.