(Bloomberg) — Sony Corp. Chairman Howard Stringer said the company’s top management priority is “to restore profitability in our television and game businesses,” both of which lost money last fiscal year. Stringer, 66, made the comment at Sony’s annual shareholder meeting in Tokyo today. The world’s second-largest consumer electronics company is scheduled to announce its next mid-term business plan on June 26. Last month Sony predicted its games unit will post its first annual profit in three years after reducing the cost of making PlayStation 3s. Under Stringer, the PlayStation division lost $3.4 billion in the past two years after its flagship player was outsold by Nintendo Co.’s Wii. Chief Financial Officer Nobuyuki Oneda said in May Sony’s TV business had a 73 billion yen ($678 million) loss in the year ended March 31.
Sony said when it reported earnings on May 14 profit at the electronics division, which makes Bravia TVs and Cyber-shot cameras, will fall for the 12 months started April 1 as the stronger yen erodes the value of its exports. Income at the business more than doubled to 356 billion yen last year.
Tokyo-based Sony forecast net income will drop 22 percent to 290 billion yen in the year started April 1, matching the median estimate of five analysts in a Bloomberg survey. Profit almost tripled to a record 369.4 billion yen last fiscal year.
Lose Top Rank
Sony forecast it will sell 10 million PlayStation 3 machines and 9 million PlayStation 2s this year. That means the company may lose its rank as the world’s largest maker of home video-game consoles because Kyoto-based Nintendo has projected it will sell 25 million Wii players this year.
In response to shareholder complaints that Sony’s dividend is too low in comparison with Matsushita Electric Industrial Co., the biggest consumer electronics maker, and Sharp Corp., Oneda said the company’s policy “is to provide stable dividend payments.”
In the year ending March, 2009, 17 percent of Sony’s net income will be allocated to dividend payments, while the ratio at Matsushita and Sharp is 30.5 percent and 29 percent respectively, according to the companies’ earnings statements.
Sony in May doubled its annual dividend to 50 yen for the current fiscal year, after keeping it at 25 yen for the last 18 years.
Stringer, Sony’s chief executive officer since 2005, also told shareholders the company’s efforts to be an innovative company are still “under way.”
`Not No.1 Yet’
“Three years ago, we were criticized for the lack of innovation. Three days ago, in a UK brand poll, Sony was ranked No.1 this year,” Stringer said. “But, we are not No.1 in my mind yet.”
A motion by some shareholders for full disclosure of every board member’s salary and retirement package was defeated. Sony President Ryoji Chubachi said the board opposed the demand.
Sony only publishes managers’ combined salary and retirement payments without giving a breakdown. In an invitation to the shareholder meeting, Sony said its disclosure is sufficient.
The shares fell 2.3 percent to close at 5,100 yen on the Tokyo Stock Exchange. They’ve lost 18 percent this year, compared with an 8.1 percent decline by the benchmark Topix index.
Courtesy Bloomberg.
