Sony Corp (ADR) (SNE) Exits PC and Low Margin Businesses


Sony Corp (ADR) (NYSE:SNE) has exited the PC business that continued to affect its margins as well as smaller businesses that did not perform to expectations according to the company’s CEO, Kazuo Hirai, who was interviewed on CNBC.

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The CEO reiterated that being a Japanese company has limited Sony Corp (ADR) (NYSE:SNE)’s ability to enjoy success as fast as many people would have loved. Sony continues to engage a new business strategy that has seen it transform some of its segments into subsidiaries as well as cutting ties with entities with slow growth and lower margins.

“[..] We took the TV business and made it into a fully owned subsidiary with a quick turnaround decision-making, etc. So, we are moving the bar in a lot of different fronts we are making some progress,” said Mr. Hirai.

The recent changes in the company’s operations strategy come in the wake of many investors raising concerns about the company’s future with many considering that the company has lost consumer confidence. The niggling question at the moment is what is the main core business for the company, having ventured into consumer electronic goods, handset devices as well as real estate in Japan and is also predominantly active on the entertainment front.

“[…] We have actually exited a lot of the businesses that are not core to our businesses like the chemicals business and unfortunately for example the PC business small-panel LCD business and also it’s all about focus and we are trying to refocus the electronics business on those areas which we believe we can make a huge difference […],” said Mr. Hirai.

Video gaming and network services, as well as digital imaging business, remain Sony Corp (ADR) (NYSE:SNE)’s core business complimented by the mobile business, after cutting ties with some segments.

Sony Corp (ADR) (NYSE:SNE) is in the process of reviving its TV business with the CEO emphasizing that the company remains the biggest player in the image sensor technology and manufacturing business, which is expected to be a big hit in the future.

D. E. Shaw owns 54,312 shares of Sony Corp (ADR) (NYSE:SNE), with a reported value of $911,000.

Disclosure: none

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