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Bloomberg
Sony Corp., once known for pushing the boundaries of technology, is starting to look a little bit boring under Kenichiro Yoshida.
The new CEO’s reputation as a stoic numbers guy was demonstrated on Tuesday when he unveiled mid-term targets for the first time as chief executive officer, predicting conservative profit growth across most divisions over the next three years as the company focuses more on content and services.
The strategy announcement echoed results issued less than a month ago, when Yoshida gave an outlook for the current year that set a low bar and jolted investors. The shares fell 2 percent on Tuesday, the biggest decline since May 1, the day after the earnings report. While the former chief financial officer said the goal is to generate “high profitability†in electronics, entertainment and financial services, the biggest news of the day was Sony’s agreement to buy EMI’s music catalog for about $2 billion.
“As a former finance executive, Yoshida isn’t the type to make unrealistic predictions, and this mid-term plan plays it safe,†said Hiroshi Kato, general manager at Chibagin
Asset Management.
Sony even predicted a decline in the game and networks business, forecasting operating profit of
$1.2 billion-$1.5 billion by March 2021, compared with the current year’s outlook for 190 billion yen.
“I’m not putting much of my color on this mid-term plan,†Yoshida said. “Our vision of moving people’s emotions is unchanged. Our message this time is to pursue that further.â€
The measured outlook comes as Yoshida seeks to push Sony toward more-predictable and stable profit streams from gaming subscriptions, online content and intellectual property licensing. At the same time, he expects to sell fewer hardware products — TVs, digital cameras, smartphones and PlayStation consoles — as the rise of Chinese manufacturing has turned gadgets into a business with razor-thin profit margins.
Sony is targeting operating cash flow of at least 2 trillion yen over the next three years.