Sony, Panasonic post big profits as turnaround plans take hold

GMT 10:11 2015 Thursday ,29 October

Arab Today, arab today Sony, Panasonic post big profits as turnaround plans take hold

Sony was boosted by success
Tokyo - AFP

Two of Japan's biggest electronics giants booked soaring profits Thursday in a sign that efforts to fix their tattered balance sheets were finally paying off.

Sony kicked off the upbeat news by reporting a six-month net profit of almost $1.0 billion, crediting its PlayStation video game unit and smartphone parts business for a big improvement in its finances.

Shortly after Sony's announcement, rival Panasonic also said that its fiscal first-half profit jumped, as the firm presses on with a corporate shakeup.

The pair, along with still-struggling Sharp, have stumbled in the consumer electronics business that built their global brands, including losing billions of dollars in televisions over the past decade as they faced fierce competition from lower-cost rivals from South Korea and Taiwan.

In response, the trio launched wide-ranging restructurings that have included layoffs and asset sales in a bid to restore their fading glory.

On Thursday, Sony said its net profit came in at 116.0 billion yen ($960 million) in the first half of its fiscal year, reversing a 109.2 billion yen loss a year earlier. It also reversed a year-earlier operating loss, although sales ticked down 0.3 percent to 3.7 trillion yen.

"Sony remains on course to recovery -- it's in the final stages of restructuring," said Rakuten Securities analyst Yasuo Imanaka.

"Image sensors and PlayStation 4 consoles were major contributors," he added.

The strong earnings come a day after Sony said it would acquire Toshiba's image sensor business.

The deal could boost its position as a global leader in the sensors, which are key components of smartphones and other mobile devices.

Sony executives have also been focusing on the upbeat video game and entertainment units -- including a Hollywood studio and music label -- and turning around the long-struggling television division.

- Lesser-known businesses -

Panasonic, meanwhile, said its six-month net profit soared 37 percent 111.33 billion yen, while sales ticked up 1.0 percent to 3.76 trillion yen, as it focuses on casting off money-losing businesses.

The company has shifted its attention to its lesser-known endeavours, including energy and an auto division that makes various products found in vehicles, from electrical components to car navigation systems.

"The company has strategically focused on high value-added products, which contributed to operating profit growth as well," Panasonic said after publishing the figures.

Japan's electronics leaders have also benefited from a weak yen which helped make them more competitive overseas and inflated their repatriated profits.

However, Apple-supplier Sharp, which reports Friday, is still mired in losses.

The Aquos-brand maker warned this week it was on track to lose nearly $700 million in the half-year through September owing to a slump in demand for its smartphone screens.

Sharp's latest earnings will likely reignite concerns about the future of a company that has repeatedly appeared on the brink of bankruptcy in recent years as it trudged ahead with a painful restructuring.

"The situation surrounding Sharp is still severe -- they have strong technology but their finances are extremely weak," said Hideki Yasuda, an analyst at Ace Research institute in Tokyo.

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