Sony Corp., Japan’s biggest consumer-electronics exporter, unexpectedly reported an eighth consecutive quarterly loss on waning demand for TVs and consumer preferences for Apple Inc. and Samsung Electronics Co. devices.
The net loss narrowed to 10.8 billion yen ($115 million) in the three months ended December from 159 billion yen a year earlier, the Tokyo-based company said in a statement. The TV maker was expected to post a 21 billion-yen profit based on the average of three analyst estimates compiled by Bloomberg. The company reiterated its forecast for annual net income of 20 billion yen, its first profitable year in five.
Japan’s biggest consumer-electronics exporter has lost market share as its struggles to develop products able to compete with Apple iPads and Samsung Galaxy smartphones. A weaker yen, which boosted earnings at Japanese rivals Panasonic Corp. and Sharp Corp., also failed to help Sony withstand a slump in global TV sales.
“Nothing substantial has really changed in Sony’s businesses,” Keita Wakabayashi, an analyst at Mito Securities Co. in Tokyo, said before the announcement. “TV is no longer a cash cow, and the outlook for Japanese consumer-electronics makers remains tough.”
Sony rose 2.6 percent to 1,519 yen in Tokyo trading before the earnings announcement. The stock has jumped 59 percent this year.
Panasonic posted a surprise net income of 61 billion yen in the three months ended December, while Sharp made its first operating profit in five quarters. The yen has plunged since the end of September, helped by new Prime Minister Shinzo Abe’s call for “bold monetary policy” to beat deflation and weaken the currency.
Sony’s electronics unit faces a “tough environment,” Chief Financial Officer Masaru Kato said during a briefing in Tokyo. He said the weaker yen presents a “significant upside” for the company next fiscal year.
Sony cut its full-year sales targets for TVs to 13.5 million units from 14.5 million, for compact cameras to 15 million from 16 million, and for portable game players to 7 million from 10 million. It kept its smartphone sales target of 34 million units.
Sony’s mobile products division, which makes Xperia smartphones and tablet computers, posted an operating loss of 21.3 billion yen, narrower than the loss of 48.4 billion yen a year earlier.
Operating loss at the home-entertainment unit, which includes TVs, narrowed to 8 billion yen from 89.8 billion yen a year earlier.
Sony President Kazuo Hirai is trying to revive the company’s electronics business by focusing on mobile devices, games and digital imaging. He is cutting 10,000 jobs and has pledged to make the TV unit, the world’s third-biggest, profitable in the year starting April 1 after nine straight years of losses. The company projects an 80 billion-yen loss at its TV unit in the current fiscal year.
To help fund the turnaround, Sony said last month it will sell its New York headquarters to investors led by Chetrit Group for $1.1 billion. The deal, set to close in March, will generate an operating income gain of about $685 million, Sony said Jan. 18. The Tokyo-based company also raised 150 billion yen selling five-year convertible bonds in November, its first offering of such securities since 2003.
Third-quarter restructuring charges increased to 16.7 billion yen from 4.5 billion yen a year earlier.
Sony is counting on new products to help lure consumers from Apple iPads and Samsung Galaxy devices. At last month’s Consumer Electronics Show in Las Vegas, it introduced new higher-definition TVs, water-resistant smartphones and a more-powerful digital camera. The company also revealed plans to offer Ultra-High Definition content from Sony Pictures for downloading on its TVs.
A PlayStation event has been announced for Feb. 20, stoking speculation the company will unveil a fourth-generation console. Sony also has invested in medical-device maker Olympus Corp. and gaming platform company Gaikai Inc., and in facilities to make image sensors.
Suwon, South Korea-based Samsung — the world’s biggest maker of smartphones, TVs and computer-memory chips — last month warned that profit this year would be hit by a strengthening won. It also said global demand for smartphones was slowing.
Apple’s profit grew at the slowest pace since 2003 in the quarter ended December as the lack of a low-cost iPhone dented growth in emerging markets.
Worldwide smartphone shipment jumped 36 percent to 219.4 million units in the fourth quarter, according to IDC. Sony’s market share rose to 4.5 percent from 3.9 percent a year earlier, the researcher said. Samsung topped the rankings controlling 29 percent of the market, followed by Apple with about 22 percent.
Global flat-panel TV shipments probably fell 2 percent to 217.7 million units last year, the first annual decline, according to DisplaySearch. They may rise 3.7 percent to 226 million this year, it said. Industrywide revenue may fall 1 percent to $104.6 billion, following a 6 percent decline last year, according to the researcher.
© Copyright 2014 Bloomberg News. All rights reserved.