Tuesday, July 8, 2014

Sony: Is There Any Light At The End Of This Tunnel?

This article was originally published by Seeking Alpha on June 29, 2014

By Sarfaraz A. Khan. Research Asst. Ali Ilahi

Sony has forecast another massive loss in the current fiscal year. Sony’s American depository receipts continue to under-perform. Its loss-making television unit could report a rare profit, but its long-term outlook is uncertain.However, long-term oriented investors might still want to stick around.

The Japanese technology behemoth Sony (SNE) has forecast another massive loss of ¥50 billion ($489 million) for the current fiscal year ending March 2015, a second annual loss in a row following last year's ¥128.4 billion ($1.25 billion). As a result, over the last three months, the company's American depository receipts have dropped by more than 8%, closing at $16.76 on Friday.

Over the last 52-weeks, Sony has fallen by more than 20%.

Unlike its rival Panasonic (OTCPK:PCRFY), which has successfully turned itself around by focusing on the business customers, Sony is still in a mess. This, however, does not mean that inventors should give up on Sony, especially since the light at the end of this tunnel is already in sight.

Television Programming

This, however, hasn't stopped Sony from making acquisitions that could push its margins higher. On Thursday, Sony announced that it is buying U.K.'s CSC Media Group and its 16 channels for $180 million. Through this acquisition, Sony will significantly grow its portfolio of channels to 25 as it increases its focus towards the lucrative television programming industry, as opposed to movies.

While Sony generates significantly higher revenues from movies than the television network, it reported a 5.4% drop in revenues from … read full article at Seeking Alpha