By Thomas Wilson
TOKYO (Reuters) – Shares in Sony Corp soared to a nine-year high on Wednesday after it forecast record earnings, underscoring the success of its restructuring efforts and raising expectations of sustained momentum in profitability.
Under Chief Executive Kazuo Hirai, Sony has streamlined unprofitable electronics businesses and capitalized on the spread of smartphones with its image sensors whilst retaining a living-room presence with its consoles.
The electronics and entertainment firm hiked its full-year operating profit forecast by 26 percent to 630 billion yen ($5.5 billion), citing strong sales of image sensors as well as high-end television sets.
“Image sensors will be used in a wide range of areas, and the market is very large,” said Masayuki Otani, chief market analyst at Securities Japan Inc.
“Profitability is increasing, and in the mid- to long-term we expect the stock price to reach its 2007 level of 7,190 yen.”
Sony’s stock rose as much as 11.6 percent to its highest level since June 2008. In late morning trade, it was up 10.5 percent at 4,878 yen.
For the July-September quarter, profit jumped almost 350 percent to 204.2 billion yen, outstripping analysts estimates.
Prior to the earnings release, Sony’s stock price had plateaued in recent months due to scepticism about future growth, as the PlayStation 4 enters the late stages of its life.
(Reporting by Thomas Wilson; Editing by Edwina Gibbs)