The change in circumstances is coming more from digital image sensors for smartphone cameras and gaming consoles than sound systems and TV’.
Sony who has witnessed years of losses has projected operating profit of $2.68 billion and net profit of ?140 billion in the year ending March 2016.
Sales are expected to slip to ?7.9 trillion from ?8.2 trillion. Results were mixed in the company’s consumer-electronics unit. Sony made money on TVs after a decade of losses, and cost-cutting drove a more than doubling of earnings for imaging products & solutions, which includes cameras.
Sony management said that they have reduced their exposure to unprofitable mass-market consumer electronics and focuses on digital image sensors.
Staff have been warned not to get their hopes up too quickly. “I believe the largest part of our restructuring effort is now behind us, but we haven’t fully recovered yet,” Chief Financial Officer Kenichiro Yoshida said at a briefing.
For the current financial year, Sony expects a 17% increase in sales and a 32% rise in operating profit in its devices division, which makes image sensors.
“The device segment isn’t risk-free, especially because the largest market for image sensors is the mobile industry, which is very volatile,” Mr. Yoshida said. “But at this point we have considerable technological strength in sensors.”
For its just-ended fiscal year, Sony posted a net loss of ?126 billion-a sixth loss in seven years-as the company booked a one-time charge for its troubled smartphone unit.
Sony claim that they have ended a pattern of missing earnings expectations and lowering forecasts. Instead, it has several times revised its forecasts upward or beaten predictions.
Sony CFO Kenichiro Yoshida “We downgraded our forecast 15 times in the past seven years, and we’ve been careful not to do that again,” Mr. Yoshida said, adding that Sony needed to “restore confidence among investors.”
The company’s share price has more than doubled over the last year.
On Thursday, before the fiscal-year results were posted, the stock fell 1.3%.
Sony’s mobile communications division, which includes smartphones, posted an operating loss of ?220 billion, largely because Sony wrote down its value.
After failing to challenge market leaders Apple and Samsung Sony has scaled back efforts to sell its phones in several markets including Australia and is now focusing on high-end devices in Japan, Europe and a handful of other places.
Analysts said that with Sony’s restructuring finally bearing fruit, they are eager to learn how the company will move forward strategically.
“I hope Sony will implement needed efforts, such as investments, to achieve sustainable growth and not just pursue short-term recovery,” said Yu Okazaki, an analyst at Nomura Securities. “That’s how Sony will restore investor confidence.”
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