The price of Sony shares increased on Wednesday, reaching a nine-year high. This is after increasing more than 11 percent in the third business quarter. The positive change is attributed to the fact that the Japanese electronic company relooked its profit forecast for the financial year which is supposed to end on March 2018.
Prior to the announcement, the company had estimated its profit to be $5.5 billion, which is a representation of a 26 percent increase from 500 billion yen, according to their August forecast. The profit attained is much higher than the 525.7 and 585.5 billion yen the company recorded in 1998 and 2016 respectively.
The increase in profits is attributed to a strong home entertainment segment and favorable foreign exchange rates, the company’s CEO said. A survey done by Reuters indicated that Sony’s profit for the quarter ending Sept 2017 was 204 billion yen, which is equivalent to $1.79 billion. The profit beat their 140.5 billion yen target.
Chief strategist of the company Michael Robinson hailed the restructuring effort started under CEO Kazuo Hirai as a factor that also led to the increase in profits.
According to a note read on 31st October by Jefferies, Sony’s chief analyst, the company has predicted its profits to increase up to 664 billion yen in the financial year ending March 2018. According to Atul Goyan, a financial analyst, the company has the potential to increase its profit margin to 673 billion yen by 2020. Sony units of capital were also up by 9.93 percent and have maintained the 40 percent increase to date.
The analyst also added that company’s revised guidance of 630 billion yen surpasses all the market operating profits for the fiscal year ending March 2018. The amount is even higher than the market forecast for the financial year ending March 2019.