TOKYO (Reuters) - Sony Corp surprised investors by lifting its annual outlook after returning to the black in the first quarter thanks to improved demand for Bravia flat TVs and PlayStation 3 game consoles.
Rivals Panasonic Corp and Sharp Corp also reported profits for April-June, compared with losses a year earlier, underscoring healthy consumer demand for LCD televisions, PCs and other electronics goods.
Panasonic joined Sony in edging up its annual outlook and unveiled plans for a $5.7 billion share offering to fund a buyout of two units as it seeks to cut overlap and expand sales of energy and environment related products.
Investors remain cautious about the prospects for electronics maker’s profits given the yen’s persistent strength and tough competition with South Korean rivals such as Samsung Electronics and LG Electronics.
“It (Sony) did well in the April quarter with aggressive marketing, especially in its TV business, but its growth rate will slow down in the current quarter because overall TV sales are weakening in line with a softening global economy,” said Park Young-Joo, an analyst at Woori Investment and Securities in Seoul.
Sony, the world’s second-largest camera maker after Canon Inc, reported April-June operating profit of 67 billion yen ($766 million) versus the consensus for a 13 billion yen loss in a poll of four analysts and a loss of 25.7 billion yen a year ago.
Sony cited big improvements in sales of Bravia LCD TVs, Vaio PCs and Playstation 3 game consoles and software, while also benefitting from Chief Executive Howard Stringer’s aggressive cost-cutting implemented in the last financial year.
“Sony’s results far exceeded market expectations. The main drivers were stronger demand for electronics products and solid demand from China and emerging markets like Latin America,” Anita Huang, manager of ING’s Japan Fund, said.
She said the fund plans to buy more shares of Sony due to the better-than-expected results.
For the year to March 2011, the electronics and entertainment giant lifted its operating profit outlook by 12.5 percent to 180 billion yen, compared with the 152.6 billion consensus from 22 analysts surveyed by Thomson Reuters I/B/E/S.
The Japanese firms’ results were more upbeat than LG Electronics, which announced a worse-than-expected 90 percent fall in quarterly profit on Wednesday, hit by poor TV and mobile handset sales.
Sony shares rose 0.1 percent ahead of the announcement, while Sharp lost 1 percent and Panasonic tumbled 7.7 percent in heavy volume in a fall triggered by an earlier Reuters report of its capital raising plan.
Sony’s mobile phone joint venture with Ericsson, Sony Ericsson, posted a second consecutive quarterly profit earlier in the month, recovering from a dismal 2009 on robust demand for smartphones.
Additional reporting by Nathan Layne in TOKYO and Faith Hung in TAIPEI, Editing by Jean Yoon and Anshman Daga