Sony reports first annual profit in five years

Sony has reported an annual profit for the
first time in five years, boosted by asset
sales and a weakening yen.

Net profit was 43bn yen ($436m; £280m) in
the year to 31 March, compared with a
457bn loss a year earlier.

Sony said the yen's recent fall, which makes
its goods cheaper for foreign buyers, boosted
sales. A weak yen also lifts profits when
firms repatriate their foreign earnings back
home.

But some analysts said gains from asset
sales had skewed the latest numbers.
The firm said it expected its profits to rise to
50bn yen in the current financial year, with
the yen forecast to remain weak.

The Japanese currency has fallen more than
20% against the US dollar since November
last year, after policymakers unveiled a
series of aggressive measures aimed at
spurring growth in the economy.

Restructuring process

Sony, which was once a market leader in
various product categories, has seen its
fortunes plummet over the past few years.

Increased competition, falling prices and
narrowing profit margins have hurt its
business, especially in the TV segment which
has been making a loss for the past eight
years.

As a result, Sony has been trying to
restructure its business model and reduce its
costs.

As part of the restructuring process, the firm
has sold key assets over the past few
months, including its US headquarters in New
York and some of its shares in M3, a
medical research and marketing firm.
The firm has also offloaded its "Sony City
Osaki" building in Tokyo.

Sony said the sale of all these assets had
resulted in gains of nearly $2.5bn during the
last financial year - and the figure
contributed to the rise in its earnings during
the period.

Analysts said that given the impact these
sales have had on its profit - the numbers
were not a true reflection of the firm's
success.

Gerhard Fasol of Eurotechnology Japan said
that these gains "really need to be subtracted
from the results, to understand the regular
operating results".

Mr Fasol pointed out that the firm's results
indicated that its electronics division
continued to struggle and that the unit had
not been turned around yet.



Source:bbc