Sony CEO Kaz Hirai’s rebuilding job is showing its first signs of verified success after the company posted net profits of $458 million (43 billion yen) for its 2012 financial year [PDF], its first annual profit for half a decade.
The results have been helped by the sale of a string of assets and the dollar-yen exchange rate, and the figures come in above Sony’s prediction of $404 million (40 billion yen). Operating profit for the year was $2.45 billion (230.1 billion yen), which represents a marked improvement on the $820 million loss that the Japanese tech giant posted in 2011.
Sony recorded $72 billion (6,800 billion yen) in sales, which was an increase of 4.7 percent on the previous year. The company says that this is primarily down to its takeover of Sony Ericsson (now Sony Mobile), exchange rates and an increase financial services revenue, but it does admit to “a decrease in unit sales of key electronics products”.
The sales of assets — see below — is cited as the key driver behind the operating income, while the firm’s TV business lost less than in previous years thanks to its Television Profitability Improvement Plan.
Initiatives undertaken to streamline Sony’s business have included: decoupling its Sony Ericsson joint venture; selling off its chemical products businesses for $730 million and offices in Tokyo for $1.2 billion and New York for $1.1 billion; divesting shareholdings in a number of companies — including a 13% stake in DeNA for $470 million — and cutting employee head count, by 10,000 worldwide, 1,000 of which were in Japan.
The business has also seen considerable personnel changes in the last year, as Hirai replaced Howard Stringer as CEO, while a series of other reshuffles included the installation of a new mobile chief. Hirai is one of a number of candidates up for election to the Sony board, as announced this week. MIT Director Joi Ito is another interesting name on the list.
A demonstration of Sony’s commitment to reversing its fortunes came last week when a record 40 company executives agreed to forgo their annual bonuses to help the struggling firm.
Hirai has come in and steadied the boat with his series of sweeping reforms and changes, and, while the financial results are a platform for Sony to build upon, the reduction in sales of key products is a cause for concern.
Headline image via jamiemc / Flickr