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Sony reports first annual profit in five years | Sony reports first annual profit in five years |
(about 2 hours later) | |
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. | 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. | 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 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. | 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. | 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. | 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". | 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. | 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. |