Sony Cuts Costs, Boosts Orders to Fight Strong Yen
Japanese electronics maker Sony will cut costs and attract more orders to offset the negative impact of the yen's strength on its profit, the company's president said on Thursday.
Sony President Ryoji Chubachi told a news conference that for every one yen rise in the U.S. dollar, the company loses about 6 billion yen (US$58.6 million).
"We will lower our production costs and accept more orders so that the impact of the firming yen on profits will not be that serious," he said, speaking at an event in Taipei.
The rapid rise of the yen and other Asian currencies against the dollar has hurt exports from the region to the United States, a key sales destination for companies such as Sony.
This year alone, the yen has strengthened from about 111 to the dollar to about 102.5, although it was as strong as 95.7 last month.
Sony shares were up 0.93 percent midway through the trading day in Tokyo.
In January, the Japanese maker of PlayStation game gear and Vaio PCs posted a small rise in quarterly operating profit and cut its outlook as weaker markets ate into its investments and a firmer yen hurt overseas sales.
Sony enjoyed robust holiday demand for its Cyber-shot digital cameras and Handycam camcorders and managed to return its game division to profit by cutting PlayStation 3 production costs and boosting sales of its portable game machine.
But citing the rising yen, the company at that time lowered its operating profit forecast for the fiscal year to March to 410 billion yen from 450 billion yen.
It raised its net profit forecast for the fiscal year by 3 percent to 340 billion yen, however, on the strong performance of its mobile phone joint venture with Ericsson and one-off gains from the listing of Sony Financial Holdings.
Sony, which vies with Samsung Electronics and Sharp in flat-panel TVs, has shed 10,000 jobs and a wide range of non-core assets over the past few years.
Chubachi also said that in its 2007 fiscal year, Sony's purchasing from Taiwan suppliers, encompassing a wide range of electronics such as LCD panels, grew 10 to 20 percent from fiscal 2006.