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Sony shares jump 12% on earnings outlook to four-year high

TOKYO: Shares in Sony jumped almost 12 percent in early trade Thursday to its highest intraday level in nearly four years, after the struggling electronics giant hiked its earnings outlook.

Sony soared to 3,094 yen on the Tokyo Stock Exchange, up 11.73 percent from Wednesday’s close, with buying bids overwhelming sell offers.

After the Tokyo market closed on Wednesday Sony announced it now expects to lose 170 billion yen ($1.4 billion) in its fiscal year to March, down by more than a quarter from an earlier estimate.

It also projected an operating profit of 20 billion yen, turning around an October forecast that it would lose 40 billion yen.

A weak yen helped Sony’s third-quarter results as net profit more than tripled to an estimated 89 billion yen, while sales grew 6.1 percent to 2.55 trillion yen.

The company said its smartphone and PlayStation console businesses picked up in the October-December quarter while restructuring costs shrank.

A big contributor to the robust quarterly results was sales of image sensors for cameras built in Sony’s Xperia and Apple’s iPhones.

“The demand for front-facing camera modules is going through the roof, because everyone wants to take high-quality selfies, and that doubles the market size for Sony,” Amir Anvarzadeh, a manager of Japanese equity sales at BGC Partners in Singapore, told Bloomberg News.

“The auto segment of the market is also beginning to boom. Cars potentially may have more than five modules per car.”

Sony still warned of more job cuts in the mobile communications segment as it chops away at struggling units in a bid to claw itself back to profitability.

It now plans to shed a total of 2,100 jobs by March 2016, including the previously announced payroll cut of 1,000.

“Games and image sensors are doing great, even as impressions from digital cameras and televisions are less favourable,” Yu Okazaki, an analyst at Nomura Holdings said before Sony’s release of results.

Sony published the estimates Wednesday after earlier saying it would delay its finalised numbers following a cyberattack at its Hollywood film unit — linked to satirical film “The Interview”, about an assassination attempt on North Korean leader Kim Jong-Un — compromised “a large amount of data”.

On Wednesday, it said that investigating the attack and fixing the problems at Sony Pictures Entertainment would cost at least $35 million, but added that it would not have a significant impact on earnings. (AFP)

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