Tuesday, February 11, 2014

Sony también hace dinero en otros rubros...(BusinessWeek)

Sony Makes Big Profits, Just Not on Electronics

Not all companies with Sony (SNE) in the name are toxic. Take Sony Financial, the insurer in which Sony owns a 60 percent stake. While the parent company said last week that it expects to lose $1.1 billion for the 2013-14 fiscal year, Sony Financial is doing just fine, thanks.
The insurer expects net income of ¥40 billion for the current fiscal year, better than its earlier target of ¥37 billion. The updated profit forecast slightly exceeded the ¥39.7 billion yen consensus of 15 analysts. Sony Financial also increased its forecast of revenue by 6.7 percent, and revenue for the first three quarters of the current fiscal year have increased 20.2 percent. The strong results are thanks in part to growth in Sony Financial’s life insurance and auto insurance premiums.
Unfortunately for Sony, the parent company doesn’t stick to selling insurance policies. It sells TVs, too, even though it can’t manage to do so profitably. Chief Executive Officer Kazuo Hirai said the company will lose money on its television business for the 10th year in a row, with the red ink for TVs this time amounting to ¥25 billion yen. “Investors don’t have much faith in Hirai,” Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management in Tokyo, told Bloomberg News. “There’s no growth strategy.”
That’s not totally fair. Hirai is taking some steps to get Sony out of crummy businesses. Witness his decision to give up on PCs. For now, however, he seems unwilling to jettison TVs, a business with a No. 3 market share worldwide that’s nonetheless dragging down the company. “My responsibility is to turn around the electronics operation,” Hirai said. “I’d like to say this time’s reform is final, but amid intensifying competition, reform may be needed going forward.”
With competition from the Koreans and the Chinese putting pressure on Sony, the company isn’t going to solve any problems by stubbornly sticking with TVs. “You hear about losses from this company year after year after year,” Atul Goyal, a Jefferies analyst in Singapore, told Bloomberg Television. For Sony, he added, the goal should be to use the PC selloff as the first step of a broader retreat: “Salvation is an exit from electronics.”
One promising sign: Hirai is creating a separate subsidiary for Sony’s TV business. Down the road, that might make an exit easier. For now, though, there’s no salvation in sight.
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Einhorn is Asia regional editor in Bloomberg Businessweek’s Hong Kong bureau. Follow him on Twitter @BruceEinhorn.

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