THREE PILLARS
The domestic Vaio PC division will be sold to investment fund Japan Industrial Partners, which will set up a separate company to take over the operations. Financial terms of the sale weren’t disclosed, but Sony will initially hold a 5 percent stake in that company.
The TV operations will be spun off into a separate unit by July 2014, Sony said. The job cuts – mostly outside Japan – are to be implemented by March 2015, with cost savings are to kick in by the 2015-2016 financial year, Sony said. The company said it had total staff of 145,800 at the end of last September.
Sony officials said they expect to lose another 25 billion yen on TVs this year. Having last turned an annual operating profit in TVs in the 12 months ended March 2004, losses for the 10 fiscal years through March 2014 add up to 786.9 billion yen ($7.8 billion).
The three pillars that Hirai identified as central to the rebirth of Sony’s electronics division – imaging, gaming and mobile – remain uncertain bets for growth in the highly volatile consumer markets, analysts say.
Sony cut its smartphone sales forecast to 40 million from 42 million, citing weakness in Asia and Europe. Hirai has said that he would like to double unit sales of its Xperia handsets by 2015, but the lack of a contract with a major U.S. carrier and a proliferation of low-cost Chinese smartphone makers are seen as obstacles to that growth.
But the latest iteration of its popular video game console, the Playstation 4, has seen strong sales. It’s on track to beat guidance of 5 million console sales by the end of March, having reached 4.2 million at the end of December
Still, expensive development costs left Sony warning it will take at least two years to break even on the console.
Sony also slashed its full-year operating profit forecast to 80 billion yen on Thursday from the 170 billion yen it previously expected. But buoyed by a strong performance in its financial services unit in the October-December quarter, Sony posted an operating profit for the three months of 90.3 billion, almost double the previous year and beating a consensus estimate of 71.9 billion yen according to Thomson Reuters I/B/E/S.
($1 = 101.2000 Japanese yen)
(Reporting by Sophie Knight and Reiji Murai; Additional reporting by Lisa Twaronite; Editing by Kenneth Maxwell)
Article Appeared @http://www.reuters.com/article/2014/02/06/us-sony-results-idUSBREA150AK20140206