A week before the Tokyo, Japan-based Sony Corp. (TYO:6758) is expected to come out with their annual report, they have issued a forecast that the business might make a net profit of $668 million and operating profits of $2.6 billion or 285 billion yen for the fiscal year ending 2017. This is very impressive from Sony because it is 19 percent higher than a previous forecast made by the company.
Sony Makes the Maximum Profit in Almost Two Decades
Interestingly, if Sony is eventually able to achieve this, then its net income will almost treble. This would also be the maximum profit the company earns since 1998. Also, this will be the second successive year the operating profit will pass the $2 billion mark. The fill financial results of the business are expected to come out this Friday.
Sony says they have raised the forecast upward because of an expected improvement in all areas of business. Its electronic components business remains dull, though. That is one exception the company will want to work on next. The earthquake in Japan last year had pulled down the overall economic climate in Japan, and this was reflected in the financial results of Sony as well.
Sony’s Stock Jumps After Better Estimates
The stock of Sony Corp. went up sharply almost as soon as the announcement was made. In early Tokyo trading, the stock went up by 4.6 percent and reached a new high in the last three months. It clearly boosted the confidence of investors. By the end of the trading day, it was still up by 3.84 percent and was trading at 3,730.
Kazunori Ito, an analyst at Morningstar Investment Services said, “This will strengthen the market’s confidence going into the next fiscal year. Despite the strengthening yen, the fact that chips were mentioned in this release means they probably contributed quite a lot to this upward revision.”
Sony’s stock is expected to keep going up this week in anticipation of the better results on Friday. And it could go up even more if the market expectations are met when the company finally brings out the report at the end of the week.
JPMorgan Chase has already upgraded the stock’s rating to “overweight” from “neutral”. Other analysts, such as the Credit Suisse Group and the Goldman Sachs Group are also bullish about Sony Corp (TYO:6758) at this time.