Sony
sees 25-fold profit jump by 2018; could exit TVs, phones
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[February 18, 2015]
By Ritsuko Ando
TOKYO (Reuters) - Sony Corp aims to boost
operating profit 25-fold within three years by growing its camera
sensors and PlayStation units, its chief executive said, outlining a
strategy that could see the company exit the cut-throat TV and
smartphone sectors.
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CEO Kazuo Hirai said on Wednesday the Japanese consumer electronics
firm would no longer pursue sales growth in areas such as
smartphones where its has suffered competition from cheaper Asian
rivals as well as industry leaders like Apple Inc and Samsung
Electronics.
Sony would instead focus its spending on more profitable businesses
such as camera sensors, videogames and entertainment as it seeks to
return to growth after forecasting for this financial year its sixth
net loss in seven years.
"The strategy starting from the next business year will be about
generating profit and investing for growth," Hirai told a briefing,
adding that Sony's units would be given greater autonomy to make
their own business decisions.
Asked about the TV and mobile phone units, Hirai said he would not
"rule out considering an exit strategy", Sony's clearest statement
to date about the possibility of selling or finding partners for
these struggling units.
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Sony is in the midst of a restructuring that has so far seen it sell
off its personal computer division and spin off the TV business. It
has also axed thousands of jobs.
Sony shares have risen more than 80 percent over the past year as
investors applauded the restructuring, which accelerated since Hirai
appointed Kenichiro Yoshida as his chief strategy officer in late
2013.
Hirai said Sony would target return on equity of more than 10
percent by the end of March 2018, adopting a yardstick Prime
Minister Shinzo Abe has been promoting as a way to attract foreign
investors.
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He also said Sony aimed to post an operating profit of at least 500
billion yen ($4.2 billion) for 2017/18, a jump from the 20 billion
yen forecast for the year ending March 31.
Sony's revamp is starting to pay off. This month, it forecast an
operating profit instead of a loss for the financial year ending
March 31. But it still expects to book a net loss in 2014/15, albeit
a smaller amount than previously estimated.
Few expect Sony to return to the days when its Walkman and Trinitron
TV defined how people around the world consumed entertainment.
Analysts, however, have said it could make better use of its gadgets
and access to Hollywood content.
Hirai said Sony will push to expand its PlayStation network user
base, while focusing on areas such as streaming music.
(Editing by Miral Fahmy)
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