The Japanese electronics giant Sony pleased the market yesterday, saying it was set to return to full-year operating profits following cost cutting and stronger than expected demand in the industry.
The group expects to post operating profits of ¥32bn (£229m) for the full year to the end of March. It also revised its forecast net loss for the year down to ¥41bn from the ¥70bn it forecast in February. The year before, it posted a ¥227.8bn loss, its first annual loss in 14 years.
This marks a significant improvement since the group released its last forecast in February when it predicted operating losses of ¥30bn. However, it was forced to slightly lower its revenue forecast to ¥7.1 trillion from ¥7.3 trn in February.
Sony said yesterday that its products and devices divisions beat the forecast in February following "less severe than anticipated price declines and reductions in both manufacturing cost and operating expenses that exceeded expectations".
Improvements in its game business and the Vaio computers as a result of higher than expected cuts to expenses and manufacturing costs should raise ¥10bn. Its financial services business is also expected to beat forecasts by ¥15bn due to a bounce in the Japanese stock market between January and March.
Sir Howard Stringer, Sony's chief executive, has attempted to streamline operations and slash costs in response to the company's slump into full-year losses during the downturn.
The company hopes to reinvigorate its gaming business as it prepares to bring out a motion controller for the PlayStation3 and is also putting its weight behind the drive into 3D television.
In March, the company unveiled its 3D sets in March and senior managers expect sales of 2.5 million in the next financial year, 10 per cent of its forecast total sales. It is also upgrading the PlayStation3 to support 3D gaming.
Yoshihisa Ishida, the head of Sony's television arm, said at the time: "Fiscal 2010 is really a year when we think we can attack."