Sony is back in the black after posting its first full-year net profit in five years. The company made a net profit of ¥43 billion ($458 million) in the 2012 financial year — an increase on its forecast of ¥40 billion ($404 million) — following a loss of ¥457 billion ($5.7 billion) in 2011. Operating profit was ¥230.1 billion ($2.45 billion), up from a ¥67.3 billion ($820 million) loss last year. The return to profit came despite lower revenues for its camera, game, and home entertainment divisions; Sony acknowledged decreased demand for compact digital cameras, LCD TVs, and its PlayStation games consoles. The game and camera divisions reported small operating profits of ¥1.7 billion ($18 million) and ¥1.4 billion yen ($15 million) respectively, while the TV and audio division recorded a loss of ¥84.3 billion ($897 million). The most profitable divisions were the financial services arm, with an operating profit of ¥145.8 billion ($1.55 billion), and the movie business, which made a ¥47.8 billion ($509 million) profit. Since the new Japanese government took power in December and implemented sweeping economic reforms that dramatically weakened the yen, Sony is making more money on its foreign sales; shares have also significantly increased in value in the past four months. The company has raised billions more dollars from the sales of its New York City headquarters and a major Tokyo office building. With a small year-on-year sales increase of 4.7 percent, largely attributable to the consolidation of Sony Mobile following the buyout of Ericsson's stake in a joint venture, Sony's return to profit is only a qualified success. The earnings report may be good news for the company's balance sheet, but CEO Kaz Hirai, who took the reins a little over a year ago, still has much to prove in terms of shoring up the company's performance in its core electronics business. To that end, Sony predicts a ¥50 billion ($507 million) net profit for the current fiscal year, with increased demand for the company's smartphones expected to boost profits. Sony expects to sell 42 million mobile phones in the 2013 fiscal year, a 27.3 percent increase on last year, citing "strong consumer acceptance" for the Xperia Z. The company also predicts its camera business will "significantly" improve its operating profit from increased sales of interchangeable-lens and professional-level models. Sony expects to sell 42 million phones this year The launch of the PlayStation 4 is also expected to bring in further revenue; while games consoles are typically sold at a loss at launch and incur significant R&D costs, Sony says that this will be offset by increased sales, resulting in "essentially flat" operating performance. Perhaps surprisingly, given the state of the TV market in recent years, Sony also expects a return to profit for its home entertainment division due to the release of "high value-added" sets. Source:THE VERGE
