Sony mobile struggles continue; CFO to become CEO - Mobile World Live

Sony mobile struggles continue; CFO to become CEO

02 FEB 2018

Sony trimmed the sales forecast for its mobile business following a weak fiscal Q3, as it also announced changes in its top management.

For its fiscal year to 31 March, it is now forecasting sales of JPY740 billion ($6.7 billion) in the Mobile Communications segment, a JPY40 billion (5.1 per cent) downward revision from the guidance given in October 2017. It expects to meet its operating income guidance of JPY5 billion, as decreased sales are offset by reduced operating costs.

Its smartphone shipment forecast of 14 million is reduced from 15.5 million and would mark a reduction from 14.6 million in fiscal 2016.

In fiscal Q3 2017 (to 31 December), sales of JPY217.5 billion were down from JPY248.6 billion in the prior-year period due to a decrease in unit sales (although there was a positive foreign exchange impact).

Smartphone shipments of 4 million units were down from 5.1 million.

Operating income of JPY15.8 billion was down from JPY21.2 billion, having been impacted by the decreased sales, increased component prices and negative foreign exchange impact. Sony did note a reduction in operating costs and a reversal of a patent royalty accrual.

Management change
Sony’s group CEO, Kazuo Hirai, is set to become the company’s chairman, with Kenichiro Yoshida, its current CFO, stepping up to the top job.

Hiroki Totoki, the current head of Sony’s mobile unit, is set to become group CFO. Shigeki Ishizuka is taking on the role of officer in charge of the Mobile Communications unit.

“My successor, Kenichiro Yoshida, has supported me closely since returning to Sony in December 2013, contributing extensively beyond his remit as CFO and acting as valuable confidant and business partner, as we took on the challenge of transforming Sony together. Yoshida combines a deeply strategic mindset with a relentless determination to achieve defined targets, and the ability to take a global viewpoint,” Hirai said.

It was mooted Hirai had become tired by the travel schedule during his time at the helm, as he worked to improve the company’s performance.

Group performance
On a group level, Sony reported a fiscal Q3 profit of JPY295.9 billion, up from JPY19.6 billion, on revenue of JPY2.7 trillion, up from JPY2.4 trillion.

Sales were boosted by foreign exchange gains, as well as “significant” increases in Game & Network Services, Home Entertainment & Sound and Financial Services segment sales.

Its income was boosted by the removal of an impairment charge in the Pictures business which was present in the comparable period, when earnings were also subject to the impact of a 2016 earthquake. There was also improved profitability in a number of units, including Semiconductors.

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Steve Costello

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