Sony revealed its expectations to return to profit this year. For the current financial year, which runs through next March, Sony forecast a full-year net profit of ¥30 billion and expectations of an operating profit of ¥180 billion. Losses in its television business pushed the consumer electronics manufacturer to a record loss of ¥455 billion ($5.7 billion) for its financial year that ended in March.
The company, known for creating the Walkman and PlayStation, has seemed to lose its innovative edge and has fallen behind Apple and Samsung Electronics in the consumer electronics market. The company’s market value is just 3% of Apple’s at $15 billion. Sony shares have dropped 12% since the beginning of the year.
Kenichi Hirano, operating officer at Tachibana Securities in Tokyo, said, “The operating profit forecast isn’t far off the level seen two years ago. This suggests we’re on a recovery trend and last year was definitely the bottom. But I think not everyone in the market is convinced of this, especially since the company lacks a solid plan to turn around its TV business.”
Sony’s new chief, Kazuo Hirai, has planned to cut costs to help the manufacturer return to profitability. The company will be eliminating 10,000 jobs, roughly 6% of its global work force. The company also aims to reduce the losses in its television business by half. Sony’s television business has lost more than $10 billion over eight years.
Mr. Hirai believes that the future will be driven by mobile devices like the Xperia smartphone, games, cameras, medical devices, and electric car batteries. He has not spelled out a detailed plan on how Sony will achieve its goals yet, although he has set a target for group sales of ¥8.5 trillion in two years. He also wants to see an operating margin of more than 5%. Mr. Hirai said last month, “This is our only chance to change.”