Bloomberg
Tokyo

Kazuo Hirai, leading Sony Corp on a comeback after years of losses, is giving himself plenty of room to deliver more good news in the future.
The chief executive officer says operating profit will more than quadruple to ¥320bn ($2.7bn) this fiscal year. That forecast given on Thursday is about 20% less than analysts projected as Sony tries to shake its years-long reputation for disappointing investors.
Hirai is cutting costs and focusing on profitability in businesses where Sony has an advantage. That approach, coupled with chief financial officer Kenichiro Yoshida’s emphasis on accountability, has helped boost the stock 103% in the past year.
“We have revised our forecasts down 15 times in the past seven years, and that’s not something we want to repeat,” Yoshida said in Tokyo. “The profit forecast takes into account a considerable risk from foreign exchange fluctuations.” The outlook for the current year includes ¥35bn in restructuring charges and a negative impact from foreign exchange of ¥150bn.
Sales will be ¥7.9tn this year, Sony said. Net income will reach ¥140bn, marking the first annual profit in three years. Analysts projected revenue of ¥8.2tn and profit of ¥189.9bn.
“The targets announced are the minimum line, and the point is how much can Sony increase them during the year,” said Yasuaki Kogure, chief investment officer at SBI Asset Management Co in Tokyo. “Sony will be in trouble if it makes a downward revision as it’s in the process of rebuilding trust.” Sony fell 0.4% to ¥3,629 at the close in Tokyo.
The shares have gained 47% this year, compared with a 13% gain for the benchmark Topix index.
Sony forecast a 17% surge in revenue from devices, the unit that makes image sensors, and a 16% increase in the pictures division. New releases this year include “Spectre,” the latest instalment in the James Bond franchise. The earnings revival comes after Hirai sold Sony’s personal-computer business, pruned its smartphone lineup and placed the TV manufacturing business into a separate structure to boost performance after years of losses. It also started selling the PlayStation 4 console in China to tap the world’s biggest game market.
The TV making unit had a profit of ¥8.3bn in the year ended March – its first in 11 years. The business will post earnings of ¥5bn in the current year, Sony said.