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Sony Cuts FY Profit Guidance On Battery Business Sale

by October 31, 2016 General
TOKYO (dpa-AFX) – Sony Corp.(SON.L, SNE) cut its annual profit outlook after taking an impairment on the sale of its battery business, but maintained its annual sales outlook.

For fiscal year ending March 31, 2017, the company now expects operating income to be 270 billion yen compared to the prior estimation of 300 billion yen.

The company also cut its attributable net income forecast for the year by 25 percent to 60 billion yen, from the prior outlook of 80 billion yen.

But, the company still expects annual Sales and operating revenue of 7.40 trillion yen.

Sony agreed to sell its battery unit to Murata Manufacturing Co. for about 17.5 billion yen and also transfer 8,500 employees.

Sony expects to record an impairment charge of approximately 33.0 billion yen as an operating loss in the Components segment and 4.5 billion yen is expected to be recorded in income taxes during the fiscal year ending March 31, 2017. As a result, a loss of approximately 37.5 billion yen is expected to be recorded in net income attributable to Sony shareholders for the fiscal year ending March 31, 2017.

Sony will transfer to Murata the battery business conducted by Sony Energy Devices Corporation, Sony’s wholly-owned subsidiary in Japan; Sony’s battery-related manufacturing operations located in China and Singapore; and assets and personnel assigned to the battery business at the Sony Group’s sales and R&D sites in Japan and worldwide.

Business operations related to consumer sales of Sony-branded USB batteries, alkaline batteries, button and coin batteries, and mobile projectors, as well as certain other products, will not be part of the Transfer, Sony said.

Murata and Sony are aiming to complete the Transfer by early April 2017, subject to required regulatory approvals and other conditions.

Sony is due to release detailed quarterly results on Tuesday.

Copyright RTT News/dpa-AFX