Sony Corp., maker of the PlayStation 3, stayed in the red last business year but predicts a return to profit as restructuring and an aggressive 3-D rollout bear fruit.
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The Tokyo-based company Thursday reported progress toward profitability, booking a 40.8 billion yen ($439 million) loss for the year ended March 31. That’s an improvement from the previous year’s 98.9 billion yen loss, which was Sony’s first annual red ink in 14 years.
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The electronics and entertainment giant credited LCD televisions and digital cameras for helping drive its turnaround. It also cited its life insurance unit, where revenue surged 58 percent.
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We began to see improvements gain momentum from the second half last year, said chief financial officer Nobuyuki Oneda.
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Sony expects to climb back into the black in the year through March 2011. It forecasts a net profit of 50 billion yen on revenue of 7.6 trillion yen.
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Since taking over in 2005, Chief Executive Howard Stringer has been trying to unite the company’s sprawling businesses, improve efficiency and rein in costs. He strengthened control over Sony a year ago by calling for a companywide reorganization and naming a new leadership team, which includes former IBM executive George Bailey to the newly created position of chief transformation officer.
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The Welsh-born CEO’s initiatives appear to be paying off. Sony cut costs by more than 330 billion yen last year, beating its own targets, the company said. Procurement costs have declined almost 20 percent, and it has shut 11 plants since December 2008.
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As a result, Sony swung to an operating profit of 31.8 billion yen ($342 million) after a 227.8 billion yen operating loss the previous year. Some analysts view operating profit, which excludes taxes, as the best indication of a company’s pure business performance.
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The company is leaner, nimbler and cooperating under a more united front to make…