Sony hit by poor results

The PlayStation-to-mobile phone maker’s shares took a hiding in early morning trading as profits fell sharply, but rival Matsushita bucked the trend with robust earnings.

Sony

Sony has reported a sharp fall in first quarter profits, leading to a three per cent fall in its already depressed share price.

The company has been hurt by sluggish mobile phone sales and price competition, resulting in a first quarter net profit of 35 billion yen (164 million), down from 66.5 billion yen 311 million) in the same quarter the previous year.

In contrast, rival Matsushita, better known for its Panasonic brand, saw its shares rise six per cent off the back of as 86 per cent rise in quarterly net profit. The company also sold down its stake in struggling electronics maker Victor Company of Japan, otherwise known as JVC.

Sony, meanwhile, may need to sharpen the focus of its operations, which range from electronics to movies to insurance, some analysts say.

Advertisement
Advertisement - Article continues below
Advertisement - Article continues below

"Matsushita's cost-competitiveness has been improving, helped in part by removing JVC from its consolidated base," said Yoku Ihara, an investment information manager at Retela Crea Securities. "Sony management has not been able to control its diversified business operations."

Fujio Ando, senior managing director at Chibagin Asset Management said Matsushita's better earnings performance was in part due to its strategy of sticking to creating and manufacturing goods on its own, while Sony seems to have become in some areas a simple assembler of goods.

"In areas such as flat-TV panel production, Sony seems to have given up some of core manufacturing activities."

Featured Resources

What you need to know about migrating to SAP S/4HANA

Factors to assess how and when to begin migration

Download now

Your enterprise cloud solutions guide

Infrastructure designed to meet your company's IT needs for next-generation cloud applications

Download now

Testing for compliance just became easier

How you can use technology to ensure compliance in your organisation

Download now

Best practices for implementing security awareness training

How to develop a security awareness programme that will actually change behaviour

Download now
Advertisement

Most Popular

Visit/policy-legislation/data-governance/354496/brexit-security-talks-under-threat-after-uk-accused-of
data governance

Brexit security talks under threat after UK accused of illegally copying Schengen data

10 Jan 2020
Visit/security/cyber-security/354468/if-not-passwords-then-what
cyber security

If not passwords then what?

8 Jan 2020
Visit/web-browser/30394/what-is-http-error-503-and-how-do-you-fix-it
web browser

What is HTTP error 503 and how do you fix it?

7 Jan 2020
Visit/policy-legislation/31772/gdpr-and-brexit-how-will-one-affect-the-other
Policy & legislation

GDPR and Brexit: How will one affect the other?

9 Jan 2020