Sony Posts Full Year Net Profit for the First Time in Half a Decade

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One year ago, Sony posted a net loss for the 2011 fiscal year due largely to weak demand for HDTVs and the strength of the yen at the time. Sony CEO Kaz Hirai's response has been to scale back its television production and double down on its mobile and gaming divisions, as well as a fair number of layoffs across various divisions.

According to Sony's 2012 fiscal year report, these tactics have worked as the company posted a net profit of $458 million (43 billion yen) — its first annual profit in five years and a figure beating out Sony's prediction of $404 million. This number was helped somewhat by the company selling off a string of assets and a more favorable dollar-yen exchange.

Operating profit for 2012 was $2.45 billion, a huge improvement from the $820 million loss posted for 2011, while sales hit $72 million, up 4.7 percent from the previous year. Sony attributes the latter mainly to its buying out of Ericsson's half of its mobile division, in addition to exchange rates and increased financial services revenue.

Thanks to its Television Profitability Improvement Plan, the company managed to decrease its TV division losses compared to 2011. However, this is a minor aspect of Sony's overall recovery plan. Indeed, selling off its chemical products businesses for $730 million and its offices in Tokyo and New York for $1.2 billion and $1.1 billion, respectively, played a much bigger role in Sony's bottom line.

Current Sony CEO Hirai replaced Howard Stringer back in February 2012 and has since done quite a bit to steer the company toward profitability. Many of the company's executives, said to be around 40, demonstrated their commitment to this goal at the beginning of May when they declined their annual bonuses.

While the company isn't exactly safe yet, this financial report is no doubt cause for celebration.




Edited by Alisen Downey
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TechZone360 Contributing Writer

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