Sony trims loss forecast after strong third quarter

Sony said its net annual loss will likely be smaller than previously forecast after cost cuts and higher-than-expected sales of its image sensors and PlayStation video game consoles helped its third-quarter profit beat estimates.

The consumer electronics firm said on Wednesday preliminary results showed that operating profit had doubled to 178.3 billion yen ($1.52 billion) in the October-December quarter, while sales rose 6 per cent to 2.56 trillion yen.

That was well ahead of the operating profit of 96.6 billion yen, on sales of 2.38 trillion yen, expected by analysts.

Sony also forecast a preliminary full-year net loss of 170 billion yen, narrower than its forecast last October estimating a net loss of 230 billion yen for the year. The current financial year ends on March 31st.

The company had said it would delay announcing the official results for the third quarter as its Hollywood studio struggled to recover from a massive hacking of its computer systems. The company, in the midst of a restructuring, said on Wednesday its chief executive Kazuo Hirai would announce a "new business strategy" on February 18th.

Having lost ground to nimbler rivals like Apple and Samsung, Sony has been leaning on its gaming and devices businesses to partially offset weakness in its mobile phone division.

Sony said slowing smartphone sales in Asia meant the mobile division was likely to post a full-year operating loss of 215 billion yen, steeper than the 204 billion yen loss the company had expected in October.

The company also said it planned to cut 2,100 jobs in the unit by the end of the next fiscal year through March 2016, including around 1,000 cuts already announced.

In contrast to its smartphones, Sony’s image sensors, which are used in smartphone cameras, have emerged as one of its best performing product lines in recent quarters.

The company lifted its annual operating profit forecast for its devices operations to 100 billion yen from a previous forecast of 67 billion, largely due to stronger demand for these sensors.

Reuters