TOKYO (Reuters) - Japanese consumer electronics maker Sony Corp expects operating profit to more than quadruple this year, as strong sales of camera sensors and cost cuts anchor a long-awaited turnaround after years of losses on TVs and mobile phones.
Sony said on Thursday it estimates operating profit will jump in the year ending March 2016 to 320 billion yen ($2.7 billion). For the previous fiscal year, operating profit was 68.5 billion, in line with an April 22 forecast.
This year’s earnings would be Sony’s biggest annual operating profit in seven years, though well below an average analyst forecast of 408 billion yen, according to Thomson Reuters. Achieving it would mark another milestone in Chief Executive Kazuo Hirai’s long haul to pull one of Japan’s most iconic technology firms out of heavy losses, squeezed by cheaper and more nimble rivals in mass consumer electronics.
Under Hirai’s direction, Sony has reshaped itself to target expansion in lucrative new areas such as sensors used in cameras for popular devices like Apple Inc’s iPhones. That strategy has vexed some former executives who have urged Hirai to focus on innovation, not cost cuts.
“We are emerging from losses but still recuperating,” Chief Financial Officer Kenichiro Yoshida told reporters on Thursday, saying Sony was being cautious in forecasting to break with past habits.
“In the past seven years, we revised (earnings guidance) downwards around 15 times,” he said, citing fluctuations in foreign exchange rates as a major concern.
As part of its restructuring, Sony has exited PCs and spun off its TV business. It also plans to split off its audio and video business in an effort to hold subsidiaries more accountable for making a profit.
Investors have welcomed the new-look Sony. Shares have risen more than 30 percent in 2015, and year-on-year, the stock has nearly doubled, hitting 3,827.50 yen earlier this month, its highest since 2008.
Sony on Thursday forecast operating losses from its mobile communications unit will shrivel to 39 billion yen this year from a 217.6 billion yen loss in the previous year, as it cuts costs to cope with falling sales. Operating income at its devices division, including sensors, is set to grow to 121 billion yen from 89 billion yen.
Overall revenue was likely to fall 3.8 percent this year, the company said. But lower restructuring charges will help it make a full-year net profit of 140 billion yen, compared with a net loss of 126 billion a year earlier.
The company also said it plans to resume dividends, suspended in the past fiscal year, with an interim payment of 10 yen per share.
Editing by Kenneth Maxwell