Sony doubles annual net profit forecast to $500m

TOKYO (AFP) - Japanese electronics giant Sony on Thursday doubled its annual net profit forecast for the past fiscal year as a weaker yen and a sale of assets helped boost its bottom line.

Sony's new forecast for the year to March 2013 of 40 billion yen (S$500 million) net profit is up from an earlier estimate of 20 billion yen. The company reports its results next month.

A tumble in the value of the yen in recent months - losing about a fifth against the dollar since November - has helped exporters, making their products move competitive overseas and boosting the value of repatriated foreign income.

The upbeat forecast comes as Sony overhauls its business, including a money-losing television division that has forced the firm to launch a massive corporate overhaul including thousands of job cuts.

It has also unloaded real estate including its US headquarters in Manhattan for more than US$1 billion (S$1.2 billion) and a building in Tokyo worth US$1.2 billion, while selling of a chemical division and its holding in social networking firm DeNA.

The asset sales are "anticipated to significantly exceed the February forecast" with the weaker yen "favourably impacting operating income", Sony said.

The maker of Bravia televisions and PlayStation game consoles also boosted its operating income and sales estimates to 230 billion yen and 6.8 trillion yen, up 76.9 per cent and three per cent, respectively.

Sony lost 456.66 billion yen in the fiscal year to March 2011, its fourth year in the red.

Japan's electronics sector, including Sony rivals Panasonic and Sharp, has suffered myriad problems including a strong yen, slowing demand in key export markets, fierce competition especially in the struggling TV division and strategic mistakes that left its finances in ruins.

The industry has been awash in huge losses and credit rating downgrades, with Sharp saying last year it would put up real estate as collateral for bank loans - including its Osaka headquarters - to stay afloat The Japanese currency hit a record high around 75 against the dollar in late 2011 and remained strong through most of last year, hurting exporters.

But a change in government and new leadership team at the Bank of Japan which has unleashed huge monetary easing measures have helped pushed down the yen's value.

Sony's turnaround plan also includes a joint-venture deal with camera and medical equipment maker Olympus.

The electronics giant agreed to invest 50 billion yen in Olympus as part of a drive to tap the lucrative medical equipment market.

Although it is better known by the public for its cameras, Olympus controls about 70 per cent of the global market for medical endoscopes.

Sony has also announced the launch its PlayStation 4 system as it faces increasing competition from cheap - or sometimes free - downloadable video games for smartphones and tablets.

Shares in the firm, which last year fell below 1,000 yen for the first time since the era of the Walkman, closed slightly lower at 1,627 yen in Tokyo trading, down 0.18 per cent, before the new forecast was announced.