INSTANT VIEW: Sony books Q1 loss, sees second year of red ink
TOKYO (Reuters) - Sony Corp reported a smaller-than-expected quarterly loss as the maker of Bravia flat TVs, PlayStation game machines and Cyber-shot digital cameras grappled with a firmer yen and cutthroat competition in LCD TVs.
Sony's operating loss totaled 25.7 billion yen ($270.8 million) in April-June, smaller than the consensus of a 103.1 billion yen loss in a poll of five analysts by Thomson Reuters.
Sony, which is cutting jobs and closing plants to reduce costs and boost competitiveness, stood by its operating loss forecast on Thursday of 110 billion yen for the year to next March, half as big as its 227.8 billion yen loss last business year. It compares with analysts' consensus estimate of a 117.7 billion yen loss.
Following are initial reactions from analysts and investors:
PARK HYUN, ANALYST, PRUDENTIAL INVESTMENT & SECURITIES, SEOUL
"Sony's Bravia has been struggling since last year. Korean rivals caught up in terms of product quality and are now eating away at the (LCD TV) market with price competitiveness.
"Even taking into account the impact of the stronger yen, it appears Sony is lagging Korean peers in overall competitiveness.
"It is difficult to overturn the trend and reclaim market share -- it's likely that Sony would settle with the No.3 ranking in LCD TVs for the time being (behind Samsung and LG)."
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STEVE LEE, GOODMORNING SHINHAN SECURITIES, SEOUL
"Sony's numbers still came out better than the market had expected, and this comes as a positive signal, looking ahead at the second half of this year.
"However, Sony underperformed some of its global peers such as Samsung Electronics, as South Korean companies benefited from the weaker won currency.
"Also, Samsung Electronics has a superior product line in products such as light emitting diode (LED) televisions."
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KAZUHARU MIURA, ANALYST, DAIWA INSTITUTE OF RESEARCH
"Its electronics operations and its game division both trimmed losses more than expected. There is a possibility that cost-cutting measures made more progress than anticipated, resulting in earnings which were better than I expected.
"But as both operations posted double-digit losses, it leaves an impression that improvement was predominantly led by cost cuts.
"Sony is no different from other Japanese firms in that the company has exceeded expectations in cutting costs."
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MITSUSHIGE AKINO, CHIEF FUND MANAGER, ICHIYOSHI INVESTMENT MANAGEMENT
"My first impression is that the results were basically within expectations. The figures themselves are no surprise, though of course it's not positive. "Sony is making changes to adapt to the current environment but it still seems to be having trouble keeping up and perhaps should have been a bit more aggressive about cost-cutting. Of course, we need to see the details behind the results a bit more.
"It would have been nice to see more improvement over the January-March quarter. In that sense, these were frustrating earnings."
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Sony shares closed up 6.8 percent at 2,505 yen ahead of the results announcement. They gained 17 percent since April to Wednesday, underperforming a 29 percent rise in the Tokyo stock market's electrical machinery index.
(Reporting by Tokyo Newsroom)
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