Concerns Over Sony TV, Audio & Camera Businesses After Mobile Flop
Analysts are concerned about the future of Sony’s TV and audio business after a decision was made to merge their failing mobile business into the same division that is now carving out profits for their TV and camera businesses.
The reason for the closure in Australia, was that their mobile division globally like their TV business had been bleeding billions. Sony is still selling their TV’s which are made by third party manufactures after the division started to return a profit after years of losses.
During the last four quarters Sony’s mobile division lost A$1.3 Billion now analysts are concerned that the rolling of a loss-making business into one that is now making a profit will impact the consumer electronics and content Company.
Bloomberg said recently that ‘Sony’s turnaround over the past decade was built on hard-nosed accountability and the willingness to close troubled businesses”
Analysts are concerned that will make it harder for investors to see losses in the smartphone unit, which has long struggled against Apple and Samsung Electronics.
Shares plunged to a 17-month low last week after Jefferies’ Atul Goyal became the latest analyst to downgrade the company, citing worries over mobile losses. The latest move will buy Yoshida more time, but analysts say it won’t resolve the underlying problems.
“By hiding the mobile-related losses, they would take the pressure off from shareholders to shut the division down,” Amir Anvarzadeh, a market strategist at Asymmetric Advisors, said in a note to clients. “Nevertheless, the losses are bound to rise further.”
After pressure from investors Sony said that they will disclose the results for the new division “for the foreseeable future,” said spokesman Takashi Iida.
The company will provide more details about its disclosure policy on Apr. 26 when it reports the latest results.
During the last four quarters Sony has reported operating profits at its TV, audio and camera divisions. One reason given for retaining the mobile division is “5G” claims a Sony executive.
The restructuring will create a new division called Electronics Products and Solutions and is scheduled to go into effect from April 1.
That would mark the first major reporting overhaul since 2012, when previous head Kazuo Hirai split the consumer electronics unit into individual parts in a bid to boost transparency.
Sony stock has dropped 11 percent this year, compared with a 7.7 percent gain for the broader TOPIX index.