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Sony raises earnings estimate again, but it’s not thanks to smartphones

For the second time in three months, Sony announced that it will raise its outlook for the fiscal year that just ended.
By
April 22, 2015
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For the second time in three months, Sony announced that it will raise its outlook for the fiscal year that just ended.

Sony first raised its earnings estimate for FY2014 in February, when the company projected that it would make 20 billion yen in operating profit, thanks to stronger than expected sales of the PlayStation, camera sensors, and entertainment units.

Today Sony said it expects better results compared to the last estimate, and by a big margin. The company now expects to make 68 billion yen ($569 million) in the year that ended on March 31. That’s more than three times the previous estimate, and more than double the operating profit from last year, which was 26.5 billion yen. Sony also surprised analysts polled by Bloomberg, who were expecting on average just 47.2 billion for the year.

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Sony will publish its final results for the year on April 30.

The good news is Sony’s focus on gaming, sensors, and entertainment seems to be paying off. The bad news is the company will actually post a net loss of 126 billion yen, due to the massive impairment charge it took last year for its mobile unit.

Furthermore, there’s nothing in Sony’s statement suggesting any positive developments on the smartphone front. The company just introduced the Xperia Z4 in Japan, sparking controversy on whether that’s a massive mistake or a purely local play with no bearing on the international market.

Sony said in February that it doesn’t see mobile as a growth driver in its mid-term strategy. The company will focus on bringing its smartphone unit to black, by cutting costs and focusing on the higher end of the market. Cost cutting measures include the layoff of 2,100 employees this year.