As Smartphones & TV’s Struggle Sony Moves To Prop Up Share Value
Sony who has moved to exit the Australian smartphone market and is struggling in the TV market, has moved to prop up their share value with a $1.2 billion dollar buyback.
The move comes as Sony moves to promote their content creation capabilities spanning movies, music and animation over new consumer electronic products.
Las week shares in Sony fell more than 14% but after the buyback was announced
Sony’s shares rose as much as 6.7 per cent in late trading on Friday in Japan.
The buyback which is the Japanese Companies biggest ever and its first aimed at boosting shareholder returns, following a recent decline in its stock price and global concerns that the Company, has become uncompetitive in several consumer electronic markets.
At their 2019, CES Press Conference the focus was on content creation much to the annoyance of journalists who had turned up expecting several new product announcements.
Sony is not alone among Japanese Companies who are looking to prop up balance sheets.
Analysts claim that Japanese consumer electronics and appliance Companies are on track for a record level of share buybacks during the 2018-2019 fiscal year as companies face pressure to increase their return on equity in the wake of stronger focus on corporate governance and investor stewardship.
Sony’s shares rose as much as 6.7 per cent in early trading on Friday after the Japanese electronics and entertainment group said it would buy back up to 2.36 per cent of its Tokyo-listed stock from February 12 through March 22.
Recently Sony announced a downward revision to its annual revenue forecast on lower sales expectations for image sensors and smartphones, their TV business is still haemorrhaging hundreds of millions.
After taking out one-off US tax credits, Sony’s quarterly net profit also fell 43 per cent from a year earlier.
Despite current concerns about a slowdown in China and falling global sales of smartphones, Sony is expected to deliver record profits for the second consecutive year under chief executive Kenichiro Yoshida, who is credited for executing the group’s turnaround efforts.