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Sony reports first annual profit in five years | Sony reports first annual profit in five years |
(35 minutes later) | |
Sony has reported an annual profit for the first time in five years, boosted by a weakening yen and asset sales. | |
The electronics giant made a net profit of 43bn yen ($436m; £280m) in the year to 31 March, reversing a loss of 457bn yen in the same period a year earlier. | The electronics giant made a net profit of 43bn yen ($436m; £280m) in the year to 31 March, reversing a loss of 457bn yen in the same period a year earlier. |
Sony said the yen's recent fall, which makes Japanese goods cheaper for foreign buyers, had helped boost sales. | Sony said the yen's recent fall, which makes Japanese goods cheaper for foreign buyers, had helped boost sales. |
A weak currency also boosts profits of Japanese exporters when they repatriate their foreign earnings back home. | A weak currency also boosts profits of Japanese exporters when they repatriate their foreign earnings back home. |
The Japanese currency has fallen more than 20% against the US dollar since November last year, after policy makers unveiled a series of aggressive measures aimed at spurring growth in the economy. | The Japanese currency has fallen more than 20% against the US dollar since November last year, after policy makers unveiled a series of aggressive measures aimed at spurring growth in the economy. |
The firm said it expected its profits to rise to 50bn yen in the current financial year. | |
Asset sales | |
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 the 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. |