Kazuo Hirai, President and Chief Executive Officer of Sony Corp., is struggling to revive Sony through content, consoles and mobile devices. Sony Corp. Chief Executive Officer Kazuo Hirai is running out of options to turn around Japan’s iconic consumer-electronics maker. The Tokyo-based company said today it would report a wider full-year loss because its smartphone business is faltering. Sony is taking a writedown of 180 billion yen ($1.7 billion) in the value of its phone business due to competition in the market, the company said in a statement. Shares fell the most in 10 months in Germany. The company also said it won’t pay an annual dividend for the first time since its listing in 1958. Chief Executive Officer Kazuo Hirai has been working to turn around Sony by emphasizing entertainment and game content, consoles and mobile devices as demand for televisions and compact cameras has declined. With the Xperia smartphone struggling, Hirai’s other options for reviving the company are its movies and PlayStation video-game business. “Sony should have done it earlier,” said Masahiko Ishino, an analyst at Advanced Research Japan Co. “A lot of people were questioning why it didn’t write down the mobile goodwill earlier as the business hasn’t been doing well since the beginning of the fiscal year.” Sony widened its full-year net loss forecast to 230 billion yen from a 50 billion-yen loss and suspended its dividend after writing down the value of its smartphone business. The company has lost money in five of the past six years.[eap_ad_2] German-traded shares of Sony fell 8.9 percent, the most since Oct. 31, to 14.21 euros. Sony lost 1.8 percent to 2,123.5 yen in Tokyo trading today, paring a 16 percent gain this year.
Xperia Trails
When Hirai took over as CEO in 2012, he said Sony’s revival would be driven by games, imaging products and mobile devices. Since then, the company has announced job cuts and a restructuring to make TV manufacturing a separate unit. Hirai has trimmed the TV product lineup to focus on larger-screen models.
Sony trails Samsung Electronics Co. (005930) and Apple Inc. by a wide margin in smartphone sales, ranking ninth in the world in the second quarter with shipments of about 9.4 million units, according to data compiled by Bloomberg. Samsung unveiled its Galaxy Note 4 device and Apple is scheduled to release its new iPhone 6 models on Sept. 19.
Sony has about 3.1 percent of the global market for smartphone shipments, and earlier this year revised its annual sales forecast down to 43 million units from 50 million. The mobile products unit posted a loss of 2.7 billion yen in the first quarter, compared with a profit of 12.6 billion yen a year earlier.
“The size of it is larger than expected,” Damian Thong, a Tokyo-based analyst at Macquarie Group Ltd., said of the revision. “We were expecting a 60 billion-yen impairment and restructuring charge in the handset business.”
Hirai posted a surprise profit of 26.8 billion yen in the first quarter as the PS4 topped console sales and “The Amazing Spider-Man 2” topped Hollywood box-office receipts. (Bloomberg)[eap_ad_3]
