Sony is forecasting a profit for its Mobile Communications business in the year to 31 March 2017, as its smartphone turnaround plans come to fruition.
It is forecasting a slim profit of JPY5 billion ($46 million) for the year, compared with a prior-year loss of JPY61.4 billion.
This will come through an improved product mix, cost reductions resulting from earlier restructuring initiatives, and a reduction in restructuring charges in the current year.
But sales are expected to decline for the twelve months, due to a reduction in mid-range smartphone sales in light of Sony’s focus on “high value-added models” and its reduced presence in unprofitable geographies.
Full-year revenue is forecast to decline 16.6 per cent to JPY940 billion.
The company also provided smartphone shipment guidance of 20 million units for the year, down from 24.9 million in the year to 31 March 2016.
Sony had previously delayed issuing forecasts for some units, due to ongoing uncertainty resulting from an earthquake which hit its Kumamoto Technology Center.
With regard to the Mobile unit, it now said the impact from the disaster will be “immaterial”.
But the Kumamoto disaster will impact its component unit to the tune of JPY60 billion in operating income. This business has other challenges, including costs related to the end of development and manufacture of some camera modules.
The devices segment is expected to report an operating loss of JPY40 billion, compared with a prior-year loss of JPY29.2 billion, on revenue that is essentially flat at JPY960 billion.
The Kumamoto effect is being offset by the fact that Sony recorded significant impairment charges related to camera modules and batteries in the prior year. It is also expecting some income from insurance recoveries.