The Chief Executive Officer of Sony Corp. – Mr. Kazuo Hirai once again promised to swing the company back to profit. Mr. Hirai shared the ambitious goal set by Sony to increase its operating profit three times by next fiscal year.
As reported by the Wall Street Journal, Chief Executive Officer Hirai said in a statement: “We will finish off the restructuring of the electronics business, and we will not put off the reforms.” Sony will try to cut about 20% of its total expenses at the electronics sales divisions. Moreover, it will also try to reduce the headquarters and support functions costs by the next fiscal year. Mr. Kazuo Hirai said in the announcement, which was cited by Bloomberg: “Once we can achieve that, we can create a new Sony that can impress our customers again.”
Sonys Chief Executive Officer explained that the company is to reduce its costs by almost 1 billion dollars on an yearly basis. This strategy is believed to turn out beneficial and help the company generate its first profit in more than a decade. Kazuo Hirai also revealed there is a number of new initiatives, but Sony Corp. will stay focused on its core businesses, which are expected to help it make a change and swing to profit in combination with the stable profits from the entertainment and financial units.
This is not the first time when Mr. Hirai is making the same promise. Right after taking the helm a couple of years ago he promised a turnaround, but the company did not manage to emerge. According to a briefing, Sony Corp.s goal is to generate an operating profit of 400 billion yen until the end of March 2016. The company also revealed that it will invest part of its efforts in cutting about 300 million dollars of its pictures units expenses.
According to the Chief Executive Officer of the company, the strategy of restructuring plus cost reduction will provide Sony with the opportunity to generate an operating profit that amounts to 400 billion yen (3.95 billion dollars) for the next financial year.
Sony Corp. was 1.92% up to close at 1,645 Japanese yen per share yesterday, marking a one-year change of -28.17%. According to the information published on the Financial Times, the 19 analysts offering 12-month price targets for Sony Corp. have a median target of 2,170, with a high estimate of 2,800 and a low estimate of 1,400. The median estimate represents a 33.37% increase from the last price of 1,627.
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