Sony back in the black with $436 mn net profit for FY’13

Japanese consumer electronics giant Sony Corp has reported a net profit of 43 billion yen ($435.7 million) for the financial year ended March 2013 - its first annual profit in five years – gaining from sale of office buildings and investments and a weaker yen.

Sony's core electronics business, however, struggled, marked by nearly a decade of losses at its television-set division.

Sony posted an operating profit of 230.1 billion yen for the fiscal year ended 31 March 2013, compared with a 67.3 billion yen loss in the previous financial year.

Sony also saw a 4.7 per cent increase in its annual sales at 6.8 trillion yen for the year that ended 31 March 2013, from 6.49 trillion yen for the previous fiscal.

Sony logged a net profit of 93.9 billion yen in the January-to-March 2013 quarter, a turnaround from a net loss of 255.2 billion yen in the same period last year.

The company reported an operating profit of 147.1 billion yen during the quarter, compared with an operating loss of 1.4 billion yen a year ago, while sales were up 8.3 per cent to 1.73 trillion yen.

After slashing costs and streamlining its operations in the past fiscal year, Sony, under the new CEO Hirai, faces a critical test in product making.

Sony this year plans to release the PlayStation 4, the latest version of the company's videogame console, while unveiling a broader and more competitive lineup of smart phones to compete with Apple Inc and Samsung Electronics Co.

With stagnation in its present electronic business, growth for Sony has to come from new products like smart phones and gaming consoles.

Sony had, in February, forecast that electronics sales would show a sharp drop for the fiscal year that just ended. Unit sales of liquid-crystal-display TV sets were seen declining from 31 per cent a year earlier to 29 per cent while sales of digital cameras and Vaio personal computers and video cameras declined 10 per cent.

The company also dissolved the LCD-panel venture with Sharp Corp and Samsung (See: Sony ends TV liquid-crystal displays joint venture with Sharp). Instead it opted to purchase panels in the open market, where it can negotiate better prices.

Sony expects its TV sets business to break even this fiscal year, with the transition from cathode-ray-tube to flat-panel sets.

While the new PS4 may give a lift to the videogames segment, there is still no assurance of any major breakeven. Sony lost billions of dollars in the first few years of the PlayStation 3, selling the machine at a loss initially to attract customers.

Sony also faces a challenge to the PS4 as well as consumers now spend more time and money playing games online and on smart phones.

The mobile-phone division also is a growth area for Hirai. While its new products are generating good buzz, much depends on Sony's ability to crack the duopoly of Samsung and Apple.