Sony Corp (ADR) (NYSE:SNE) has stated that it will return to profitability this year. This is the first time in three years if Sony manages to pull off the feat. The company has however kept its full-year guidance low owing to the risks it faces in its turnaround.
The company, on Thursday, stated that it looked forward to profits of Y140 billion for the fiscal year to March 2016. This is a total turnaround from the previous year when the company posted a net loss of Y126 billion. The turnaround is partially due to its image sensors that are used in Apple’s iPhones.
The recover after the huge cyber attack on its movie studio last year will allow the company to pay a dividend of Y10 per share for the first half of this fiscal. According to analysts, the turnaround that could be as large as net profits of 182 billion is due to the leadership of the CEO Kazuro Hirai.
Sony, which has a past history of being overly bullish, has become much more conservative in its forecast and has started setting realistic goals. According to Kenichiro Yoshida, Sony’s CFO, the company revised down its guidance fifteen times over the last seven years. He stated that the company is taking into account every risk factor.
Under Mr. Hirai and Mr. Yoshida, the company has started focusing on profits rather than just increase in volume. For example, the emphasis on Sony’s high priced models resulted in the first annual operating profit in eleven years.
Sony Corp (ADR) (NYSE:SNE) sold off its PC business and plans to create separate subsidiaries for each of its electronics units. Deep cost cuts have been made under te leadership of Mr. Yoshida. Sales are expected to fall 3.8% to Y9.9 trillion for 2015-16 year as shipments of most electronics have dropped. Sony’s new policy of focusing on lower volumes and higher priced models has allowed Sony to stall the loss of nearly $7 billion over the past decade.
