Sony planning to restore dividends, claims it will quadruple profit by 2016

Sony has announced its fiscal year performance ending on 31 March and the results look decent, with video games, mobile, image sensors, films, music and financial services all up in revenue over the previous year, and higher operating profit at £370 million.

It plans to hit £1.7 billion in operating profit by 2016, lower than analyst estimates of £2.1 billion by next year. Sony’s stock dropped two per cent after the fiscal year report was published, although most investors seem unconcerned with performance.

Sony also revealed it plans to offer dividends to investors at £0.05 per share.

Sony was hit hard in the film and gaming sector through hacking, which cost the company £26 million in investigation and damages. The infamous Sony Pictures hack brought a major overview by the US government as to what role it should play in private sector internet security.

It also continued to drain away the last remnants of the VAIO PC brand, which was sold off to Japanese Industrial Partners last year. Rumours of Sony planning to sell its Xperia mobile brand appear to be wrong, with Sony issuing no statements in the fiscal report that it is looking for a buyer.

Sony’s big winner this year was video gaming, which managed a 33 per cent increase year-on-year in revenue. The only issue is it still runs at an operating loss of £260 million, most likely from advertising and the Lizard Squad hacking attempts on the PlayStation Network.

The worry for Sony is it makes operating profit in areas like film, music and finance (in Japan), but in all hardware sectors it is running at an operating loss. Sony claims it will fix these issues in the next year with consolidation on workforce and scope of the brand, for instance it is planning to stop fighting so heavily in the high-end Android market.

Sony has spent the last few years on the backburner selling off its unwanted brands and making headway, but it still feels like a company doing too much. Even though Sony has fragmented its company to split off into divisions like Sony Pictures, Sony Music Entertainment and PlayStation, investors wonder if it wouldn't be best to split these companies, similar to the PayPal, eBay split.