PSA Consumer Electronics: Sony (6758 JP) Company Update
Main Points• Punchy FY17 results are giving way to concerns of tough comps ahead for FY18, in part because ¥44bil of FY17 OP was from one-offs
• Company expected to report strong FY17 results, but interest lies in Sony’s FY18 forecasts
• Three divisions (gaming, music and film) should be able to report higher earnings
• Semiconductor division expected to report lower earnings. However, because of expected 4Q FY17 losses, the year-on-year comparison need not be as extreme as feared.
• Consumer electronic hardware divisions won’t be expected to improve on FY17’s performance, although there is a case that both TVs and handsets could do better.
• Financial division forecasts likely to be in line.
• Overall, we think Sony can generate ¥785bil in FY18 OP, up ¥10bil on our FY17 forecast of ¥775bil.
• FY18 pre-tax profit should get additional boost from the Spotify (SPOT US) holding, which we expect Sony will sell out of.
Founded in 2009, Pelham Smithers Associates (PSA) provides market intelligence on Asian technology, focusing in particular on Japan. The industries covered by our team of specialists are: consumer electronics, telecomms, pharmaceuticals, internet, electronic parts and materials, automotive technology, retail and capital goods.
PSA produces both company and sector reports. The focus of PSA’s research is to identify winners and losers as new technologies impact the top and bottom lines of corporations. Critical to our research is the clear explanation of how these new technologies work and how they impact companies and industries.
The founding partners have worked closely together for twenty years and the team has more than doubled in size since 2012.
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