Sony Corporation (NYSE:SNE) Plans To Focus On Its Entertainment Segment


The chief executive officer of Sony Corporation (NYSE:SNE), Kazuo Hirai, while briefing the investors in a meeting on November 18, 2014, announced that the company plans to implement such plans in the future that will raise its entertainment revenues at least by 30 percent.

The company, for its second fiscal quarter, reported a total loss of $1.14 for each share. This decrease resulted due to a goodwill charge on its mobile phone segment; the estimated non-cash charge was recorded to be as high as $1.62 billion.  Moreover, the company’s picture segment also reported a loss of $10 million for the quarter ended on September 30th. But wait. Let’s look at the bright side now. The music division of Sony Corporation (NYSE:SNE) reported a total profit of $108 million. This change resulted due to an improved equity and reduced costs.  All in all, the company is facing a little difficulty in keeping its entertainment segment’s spark alive.

The company reported revenues of $8.1 billion for the fiscal year 2015 and it plans to take it to $11 billion during the fiscal year 2018. Sony also plans to take its music business to $5.2 billion from $4.8 billion.

The company further reported that it has total savings of $250 million from its overhead operations and $50 million for its procurement and picture division. Sony is planning to implement its annualized savings in all of its divisions latest by 2016. Market researchers are of the view that these restructure savings will result in around $1 billion by the end of the year 2018.

Moreover, the chief financial officer of Sony Corporation (NYSE:SNE) is of the view that the company will be able to gather another $2 to $3 billion from the music services that the company offers. The Wall Street Journal, this step of Sony can prove quite beneficial for the company, for music is a category that gets everybody’s attention. The company plans on expanding its content services and getting the revenues in the form of ad-postings.

According to Sony Corporation (NYSE:SNE), the music division of the company will not make or break it. It will just count towards an extra $400 million annually in lieu of its music services.  It is believed that the entertainment segment is the most important one of all, for it is the most stable and strong source of profits. Sony also plans to increase its operating margin to 7.8 percent from 6.6 percent by the end of the year 2018; however, it has not revealed as to how it will achieve this target.

Coming to the stocks of Sony Corporation (NYSE:SNE), the company, on the last trading day of November 18, 2014, started its stocks at a price of $21.12 and closed at a price of $21.26, after hitting the highest figures of $21.30. As far as the intraday range is concerned, the figures were recorded to be at $21.08 to$21.30. The company has a total market capitalization of $23.04 billion with a dividend yield of 1.14 percent.