Sony Profits Set To Fall Gaming & TV Business Revenues Down
Sony who last year quit the Australian mobile market and is now refusing to say how their TV home entertainment divisions are performing has said that profits at the Japanese Company are set to fall this financial year.
Senior executives and analysts claim that what Sony is looking for is “stability” with questions raised about their future in the TV and gaming markets.
Currently the Company who are facing competition from a new Google gaming platform is spending millions developing a successor to its popular Playstation 4 which is already under pressure from PC gaming machines and Companies such as Acer with their Predator PC range.
Management at Sony have admitted to “substantial uncertainty” in their future operations with some investors calling for the sprawling Company to be broken up, activist investor Daniel Loeb, is once again circling the company.
Operating profit will be US $7.3 billion in the year ending March 2020, down from last year’s $8.21 and below the average of analyst estimates compiled by Bloomberg.
For the three months ended in March, operating income came to 82.7 billion yen, surpassing the 69.1-billion-yen average projection.
“We just need to see some stability,” said Freddie Lait, chief investment officer at Latitude Investment Management in London, which owns Sony shares. “If they can just demonstrate that earnings aren’t going to fall off a cliff, and they’re going to stabilize roughly here, the re-rating for the next three years could be very positive for the stock.”
The stock had fallen 2.1 percent this year prior to the results, compared with an 8.3 percent rise in the benchmark TOPIX.
The Company has refused to talk about medium-term profit targets for electronics and entertainment which is believed to be struggling with the Company using third part components from Companies such as LG for their OLED TV offerings.
Chief Financial Officer Hiroki Totoki later told journalists that a major acquisition in music, big growth in game software sales, and losses in mobile made it difficult to predict future profits with enough certainty.
Sony’s Xperia smartphone business, called Xperia, recorded a 41.1-billion-yen loss in the latest quarter. The losses in Australia have not been revealed.
The Company who are known to try and hide poor results and attack media who criticise their performance forecast that operating profits will fall by 10 percent to 280 billion yen this fiscal year, citing rising costs in research and development of its next-generation console.
It expects to ship 16 million PS4s this period, down from 17.8 million last year.
Their gaming division faces a big challenge to top last year’s performance, when blockbusters like God of War drove record earnings claims Bloomberg.
This year’s line-up consists of lesser-known titles, and Sony has said it won’t have a big presence at E3, Electronic Entertainment Expo in the USA in June.