Sony sees surge in chip
demand pushing profit nearing 20-year record
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[April 28, 2017]
By Makiko Yamazaki
(Reuters) - Sony Corp on Friday said it expects annual profit to surge
73 percent, closing in on a two decade-old record, as its cash-cow image
sensor business recovers from quake damage just as smartphone makers
start loading handsets with more sensors.
Sony forecast 500 billion yen ($4.50 billion) in operating profit for
the year ending March, just a few billion shy of analyst estimates
compiled by Thomson Reuters.
If achieved, profit would be at its highest since peaking at 526 billion
in the year through March 1998, when strong consumer electronics sales
combined with the popularity of the first PlayStation games console and
box-office hit "Men in Black".
The return to golden-era profit follows a massive overhaul under Chief
Executive Officer Kazuo Hirai which included exiting the laptop business
and downsizing TV operations.
Image sensors have emerged as the biggest contributor to profit growth,
as operations at a factory damaged by earthquakes a year ago return to
normal just as smartphone makers are increasingly adopting dual-lens
rear cameras in their handsets, requiring extra sensors.
"The market is growing for higher-end models with dual-lens rear cameras
or with high-performance front cameras designed for self-shooting,"
Chief Financial Officer Kenichiro Yoshida said at an earnings briefing.
"That serves as a tailwind for us."
Sony forecast its chip division, which includes image sensors, to return
to profit this year, at 120 billion yen.
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Sony Corp's logo is seen on its Crystal LED Integrated Structure (CLEDIS)
display at its headquarters in Tokyo, Japan, February 2, 2017.
meet increased demand, it will more than double capital expenditure on image
sensors to 110 billion yen, raising production capacity by 13.6 percent by the
end of March.
In the gaming business, another revenue pillar, Sony expects profit to grow 25.4
percent, spurred by software sales online.
"It has been three and a half years since the debut of the PlayStation 4,"
Yoshida said. "Sales are likely to slow (by 10 percent) to 18 million units this
year, but we are planning to launch major software titles. We believe the
platform has entered the harvest period," he said, referring to a console's
period of peak revenue.
Sony also said it expects its pictures segment, which is working through a
turnaround plan, to return to profit after a $1 billion writedown last year.
($1 = 111.1600 yen)
(Reporting by Makiko Yamazaki; Editing by Christopher Cushing)
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