Sony cuts costs, but still in the Red

The CEO of Sony promised yesterday to bring electronic campaign and entertainment back to operating profit next year, but introduced a few new strategies to put an end to the difficulties that fueled calls for its break-up.
Sony, maker of PlayStation game consoles and Bravia televisions, expects its sixth annual loss in seven years in this fiscal year. The company has been paying the rising costs of reorganization and is cutting about 5 thousand jobs.
But this reorganization-which involved cutting some business, and a reduction of annual costs at 100 billion yen, or close to $ 1 billion-will establish the basis for the recovery of the company, said the CEO Kazuo Hirai in an administrative announcement in Tokyo. Sony expects an operating profit of 400 billion yen (about US $ 4 billion) in its fiscal year that ends in March 2016.
"With the strengthening of our financial and entertainment operations, we will implement the transformation in our electronic central areas to ensure a growth of 2015 onwards," said Hirai.
The transformation of Sony will be motivated by the collective games business, imaging technology and mobile technology, he said, along with the persistence of force in music, movies and banking activity, and forays into medical technology.
"We will postpone this structural reorganisation", assured Hirai. The company expects a net loss equivalent to $ 500 million in the current fiscal year, which ends next March. In the last fiscal year, it lost $ 128 million.
Analysts and investors said that Sony needs to go far beyond reverse your situation. The company has annoyed its investors repeatedly with the establishment of optimistic targets that are not met.
The billionaire hedge fund manager Daniel s. Loeb insisted last year for Sony entertainment unit, dismember that includes film and musical asset, to allow her to concentrate on electronics.
Sony rejected the proposal, saying that the two sides of its business were central to its future. In the following months, shares of Sony fell 15%.
Difficulties. Some analysts have said that the company needs to get rid of its consumer electronics business to regain profitability.
"Electronics remains the Achilles heel of Sony," said Atul Goyal, an analyst with Jefferies technology, in an analysis released earlier this month.
Hirai, who took charge of the company in 2012, has shown that he is willing to go beyond its predecessors to reduce scattered operations from Sony.
He said in February that the problematic line of Vaio personal computers would be offered for sale, the first exit of the company of an important area of consumer products.
Another major embarrassment for the Japanese results Sony's TV business, which has been attacked by cheaper offerings from Korean rivals like Samsung and LG.
But Hirai has been shown to be averse to giving up completely televisions market, which was central to the development of the Sony brand. "We are not thinking of selling our operations with televisions or terminate them," reiterated the Executive yesterday. (Translation of Celso Paciornik)