- Title: JAPAN: Weaker yen prevents Sony from downgrading profit target
- Date: 7th February 2013
- Summary: TOKYO, JAPAN (FEBRUARY 7, 2013) (REUTERS) VARIOUS OF TOKYO STOCK EXCHANGE (TSE) SIGN IN ENGLISH READING: "TOKYO STOCK EXCHANGE" SONY EXECUTIVES WALKING IN REPORTERS (SOUNDBITE) (Japanese) CHIEF FINANCIAL OFFICER MASARU KATO, SAYING: "If the current weak yen rate persists, we think we can expect a big upside next fiscal year." NEWS CONFERENCE IN PROGRESS (SOUNDBITE) (Japanese) CHIEF FINANCIAL OFFICER MASARU KATO, SAYING: "In China where our downturn was quite obvious, we did feel the effects of the territorial disputes and the mass demonstrations by the previous autumn and it did affect us a little. But more than that, the entire Chinese market is becoming sluggish and it is reflected in the macroeconomics figures." MORE OF REPORTERS (SOUNDBITE) (Japanese) CHIEF FINANCIAL OFFICER MASARU KATO, SAYING: "The government and the private sector are attempting new measures so we predict that next year will not be worse than this year. In other words, I think next year's business environment will be better than this year's." VARIOUS OF NEWS CONFERENCE IN PROGRESS VARIOUS OF SONY EXECUTIVES WALKING OFF TSE ELECTRONIC STOCK BOARD ELECTRONIC STOCK BOARD SHOWING NIKKEI AVERAGE AT 11357.07 DOWN 106.68 TSE MARKET CENTRE TOKYO, JAPAN (FILE - OCTOBER 2010) (REUTERS) SONY TELEVISIONS ON DISPLAY SONY SIGNBOARD TOKYO, JAPAN (FILE - APRIL 2011) (REUTERS) SONY TABLETS ON DISPLAY TOKYO, JAPAN (FILE - OCTOBER 2010) (REUTERS) VARIOUS OF SONY TELEVISIONS ON DISPLAY
- Embargoed: 22nd February 2013 12:00
- Location: Japan
- Country: Japan
- Topics: General,Economy
- Reuters ID: LVAAJW54KQ694JWY2HCDUZEZO1QN
- Story Text: Sony Corp stuck with its full-year profit forecast on Thursday (February 7) as a weaker yen and asset sales underpinned earnings, offsetting weaker demand for its televisions, game consoles and other devices.
A rapid fall in the value of the yen against the dollar, and other currencies is helping the company, which sells most of its products outside Japan.
The yen weakened 11 percent against the U.S. dollar during the final three months of the year, and by 14 percent against the euro.
"If the current weak yen rate persists, we think we can expect a big upside next fiscal year," said Chief Financial Officer Masaru Kato.
Sony is strengthening its consumer electronics operations in a bid to revive the company.
The maker of PlayStation games and Bravia TVs held its full-year operating profit forecast of 130 billion yen ($1.4 billion), compared with a consensus estimate of 119 billion yen of 19 analysts surveyed by Thomson Reuters I/B/E/S.
Sony made a 67 billion yen ($715 million) operating loss in 2011/12.
In the three months to Dec. 31, Sony posted 46.4 billion yen ($495 million) in operating profit compared with a 91.7 billion yen ($978 million) loss a year ago.
The result came in below the average 72.1 billion yen ($769 million) profit estimated by six analysts.
Japanese firms, once key innovators in consumer electronics, have been overtaken by rivals such as Samsung Electronics and Apple Inc, and have lost out as consumers flock to smartphones and tablets.
The company also felt a sharp downturn in China amid territorial disputes, anti-Japanese sentiment and a slow-down in the Chinese economy.
"In China where our downturn was quite obvious, we did feel the effects of the territorial disputes and the mass demonstrations by the previous autumn and it did affect us a little. But more than that, the entire Chinese market is becoming sluggish and it is reflected in the macroeconomic figures," said Kato.
But the Tokyo-based company is optimistic the business environment will look up next year.
Kato cited the easy monetary policy and fiscal stimulus from the Japanese government and positive signs appearing in Europe.
"The government and the private sector in Europe are attempting new measures so we predict that next year for us will not be worse than this year. In other words, I think next year's business environment will be better than this year's."
Sony, under its latest CEO Kazuo Hirai, is focusing on mobile phones and tablets, cameras and gaming in a bid to return the company to profit.
It is also expanding its medical devices through an investment in endoscope maker Olympus Corp.
Sony cut its November forecast for full-year sales of TV sets from 14.5 million to 13.5 million, but kept its prediction for an 11 percent decline in sales of its PlayStation games console to 16 million.
The company also pared its estimate for sales of compact cameras for the year to 15 million from an earlier estimate of 16 million. It was down from 21 million a year earlier.
It cut its estimate for PSP and PS Vita handheld devices to 7 million from a November estimate of 10 million.
Sony for now is boosting earnings through asset sales it books as operating profit.
Hirai said in January that any assets not adding to core business, helping grow new businesses or aiding the turnaround of the TV unit could be sold.
Sony, which is also axing 10,000 jobs this business year, last month agreed to sell its U.S. headquarters building in New York City for $1.1 billion. It has also put one of its main buildings in central Tokyo up for sale in a deal that could raise a further $1.1 billion, sources have told Reuters.
The tech giant last year sold its chemical unit to a state-sponsored bank in Japan for $700 million, and is also mulling the sale of its battery business.
Since the start of the year Sony's shares have gained nearly 60 percent, rebounding from 30-year lows, compared with a 9 percent rise in the benchmark Nikkei 225.
Its share rose 2.6 percent on Thursday to close at 1,519 yen before it released its results for the quarter.
The Nikkei average came off a more than four-year high on Thursday as investors booked profits, A pause in the yen's depreciation and caution ahead of a European Central Bank meeting also helped drive the benchmark Nikkei average 0.9 percent lower.
The ECB is to hold a policy meeting later in the day that could impact the currency market.
The Nikkei closed at 11,357.07, retreating from a high of 11,498.42 struck on Wednesday.
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