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Sony targets tripling of operating profits | |
(about 3 hours later) | |
Sony is aiming to nearly triple operating profits between this financial year and next as it completes the reorganisation of its business. | |
After years of losses, chief executive Kazuo Hirai said Sony had not responded quickly enough to changing markets. | |
Sony is forecasting an operating profit, which strips out reorganisation costs, of 140bn yen ($1.38bn; £820m) for this financial year. | |
By the end of the following year it expects operating profits of 400bn yen. | |
However, on a net income basis, which takes all one-off costs into account, the company expects to still make a loss this financial year. | |
The Japanese electronics firm is setting aside 137bn yen this year for restructuring its operations, including the disposal of its Vaio PC business. | |
Credibility 'shot' | |
Sony shares rose 1.92% after Mr Hirai gave the strategy briefing in Tokyo. | |
But the investor community is sceptical about Mr Hirai's promises over what many believe are unachievable growth forecasts. | |
Douglas McIntyre, partner at 24/7 Wall St, said: "If you look at Sony over the last five years, they have said again and again the future was rosy and it turned out it wasn't. Their credibility is shot. " | |
The reorganisation of the business has involved staff cuts in its sales and headquarters divisions but Mr Hirai said there would be no more major job cuts this year. | |
Mr Hirai said: "We will finish off the restructuring of the electronics business, and we will not put off the reforms." | |
Sony's TV business, which has been making losses for 10 years, will be spun off as a separate subsidiary in July, but Mr Hirai said it would not be sold. | |
Although Sony made its reputation as a consumer electronics business, Mr Hirai emphasised the importance of its non-consumer businesses in music, movie, banking and insurance. | Although Sony made its reputation as a consumer electronics business, Mr Hirai emphasised the importance of its non-consumer businesses in music, movie, banking and insurance. |
Chief financial officer Kenichiro Yoshida said there would be no change to the structure of Sony's core electronic businesses in games, imaging technology and mobile technology. |
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