Sony sees $2.70-bn operating profit this fiscal after $1.06-bn FY15 net loss

Japanese consumer electronics maker Sony Corp said it expected operating profit to more than quadruple this fiscal year, boosted by strong sales of camera sensors and cost cuts in its ailing mobile phone business.

Sony, which reported a lower net loss of ¥126 billion ($1.06 billion) for the year ended 31 March 2015 - the sixth net loss in seven years - said it estimates operating profit to grow in the year ending March 2016 to ¥320 billion from ¥68.5 billion in the previous year.

Net income is estimated to be around ¥140 billion in the current financial year.

Results for the past year were roughly in line with a forecast announced earlier this month.

The improved outlook follows a net loss of ¥126 billion for the year ended 31 March 2015 - Sony's sixth net loss in seven years. But the company posted an operating profit of ¥69 billion for the year, up sharply from preliminary forecasts. The net loss was caused primarily by one-time costs in Sony's troubled Smartphone unit.

Operating income increased by ¥42.1 billion year-on-year to ¥68.5 billion. However, Sony said, the gains were partially offset by a significant deterioration in operating results in the Mobile Communications segment, primarily due to a ¥176.0 billion ($1.47 billion) impairment of goodwill.

Sales and operating revenues stood at ¥8,215.9 billion, an increase of 5.8 per cent compared to the previous fiscal year (year-on-year). The company said the increase was primarily due to the impact of foreign exchange rates, a significant increase in game and network services segment sales reflecting the strong performance of PlayStation 4 and a significant increase in devices segment sales due to the strong performance of image sensors.

Sony said this increase was partially offset by a significant decrease in sales in all other, primarily related to Sony's exit from the PC business and that on a constant currency basis sales were essentially flat year-on-year.

Operating income for the current fiscal year included a gain of 14.8 billion yen ($123 million) on the sale of certain buildings and premises at Gotenyama Technology Center in Japan, recorded in corporate and elimination and an 11.2 billion yen ($93 million) write-down of PlayStation®Vita (PS Vita) and PlayStation TV (PS TV) components in the G&NS segment.

Operating income in the previous fiscal year included a ¥32.1 billion impairment charge related to long-lived assets in the battery business in the Devices segment, a ¥25.6 billion impairment charge related to long-lived assets in the disc manufacturing business outside Japan and the US and goodwill across the entire disc manufacturing business, a ¥12.8 billion impairment charge related to long-lived assets in the PC business and a gain of ¥12.8 billion from the sale of certain shares of M3, Inc, all of which were recorded in `all other income'.

During the current fiscal year, restructuring charges, net, increased by ¥17.4 billion year-on-year to ¥98.0 billion. PC exit costs decreased by ¥18.7 billion year-on-year to ¥39.6 billion  which included ¥19.6 billion  in restructuring charges.

Sony is planning a comeback on the strengths of its Hollywood studio and music arms, its videogame division and the image sensor unit, which supplies camera parts to smartphone makers such as Apple Inc. The company's shares have surged on recent strength in the image sensor and game businesses, as well as cost-cutting in Sony's troubled consumer electronics operations.