CFO Yoshida gets top job to turn Sony towards an enduring stability

Replacing Kazuo Hirai, Kenichiro Yoshida will assume the chairman's role from April 1

Fifteen profit warnings in seven years.

 

That was the embarrassing pattern Kenichiro Yoshida promised to end after he took over as Sony’s finance head in 2014. Billion-dollar losses in the famed television business, red ink from personal computers and a smartphone division trying to be all things to all people in the age of the iPhone had the company in a parlous state.

 

Now, with Sony on track to post record full-year profits this fiscal year, Yoshida’s top priority as the company’s new chief executive officer will be to make sure that a new era of stability endures. He’s replacing Kazuo Hirai, who will assume the chairman’s role from April 1. Together, they have turned Sony around by bringing accountability to its units, emphasised profits over growth and cut loose legacy businesses where it didn’t have an edge.

 

“Going forward, we are going to play both offense and defense,” Yoshida said at a news conference. “The top companies by market value in the world are technology companies, and as a tech company Sony feels a sense of urgency.”

 

The results of their efforts were reflected in earnings figures released Friday. Sony lifted its operating profit forecast to a record 720 billion yen ($6.6 billion) for the year ending March, up from the previous forecast of 630 billion yen. For the three months ended December, net income of 296 billion yen was double what analysts had estimated, as strong profits in the music division and better sales of high-end TVs made up for slowing growth in games and image sensors.

 

Sony’s stock has rallied 63 per cent over the past year, compared with a gain of 23 per cent for the broader Nikkei 225 Index. The shares rose 1.9 per cent in Tokyo before the earnings were released.

 

Yoshida, 58, is highly regarded by analysts and investors for his role in bringing financial discipline to Sony after years of losses from consumer electronics. Under their reign, Sony’s sold off its Vaio personal-computer business, reshaped its TV set unit and focused the mobile business away from a destructive fight for market share. The company has used image sensors and PlayStation games to rebuild the company.

 

“He knows Sony inside out,” said Atul Goyal, an analyst at Jefferies Group.