Sony profit forecast brighter

• Image Credit: EPA
• Sony flat panel television sets on sale at an electronics store in Tokyo. Sony reported a group net loss of 260 billion yen due to the impact of the massive earthquake and tsunami.

Tokyo: Sony Corp bounced from two-month lows on expectations it might have put its troubles behind it after the electronics conglomerate said this year's operating profit would match last year's, easing worries about the impact of the March earthquake.

In its first estimate for the year to March 2012, Sony said operating profit would come in around 200 billion yen (Dh8.95 billion), prompting Macquarie to upgrade its rating on the stock to outperform from neutral. Morgan Stanley, Credit Suisse and UBS reiterated their overweight, buy or outperform ratings.

Analysts said Sony had provided markets with a realistic view of the impact of the quake and a PlayStation network hacking incident, both of which had weighed on the shares.

Sony said it expects the quake and the hacking incident to drag down operating profit by 164 billion yen in the current financial year. In contrast, the decline in Sony's market capitalisation of 264 billion yen since the quake "looks overdone", Macquarie analyst Jeff Loff wrote in a report.

Tax credits

"With shares cheap and cost impacts one-time in nature, we expect the stock to reverse its fall."

Sony expects to report a net loss of 260 billion yen for the year ended on March 31, its third straight annual net loss, after writing off tax credits following Japan's earthquake and tsunami. Many of Sony's rivals, including Panasonic Corp, have yet to issue forecasts for the current year due to uncertainty following the disaster.

Shares in Sony, the maker of PlayStation video games and Vaio computers, were up 2.4 per cent by 0340 GMT, outperforming a flat Tokyo electrical machinery subindex. Sony's shares dipped nearly 1 per cent in early trade, to its lowest since the immediate aftermath of the earthquake.

Some fund managers however said the shares, down 22 per cent so far this year, might not see sharp gains.

"I agree that shares are unlikely to keep sliding, but neither do I see any new catalysts that would bring the share price up. I expect shares to continue meandering back and forth at low levels," said Makoto Kikuchi, chief executive officer at Myojo Asset Management.

High added value

"It's not just Sony. Panasonic, Sharp — all Japanese home electronics makers have seen the base of their share price sink. They can't compete in prices, so the only route they have is to create new markets with high added value. Products that would make people pay more."

"Sony used to have this ability. But I don't see anything that would make share prices rise this fiscal year."

Sony begins partial PlayStation Network operation

Sony said personal data, including credit card numbers, may have been stolen. But the company said Sunday it had not received any reports of the stolen information being used illegally.

Kazuho Hirai, chief of Sony Corp.'s PlayStation video game unit, said in a statement that the company has beefed up security measures to protect customers' personal data.

While the partial service allows users to enjoy video games and online chat, Sony said consumers still cannot buy video games or other content by using credit cards.

"While we understand the importance of getting our services back online, we did not rush to do so at the expense of extensively and aggressively testing our enhanced security measures," Hirai said.

Among the 100 million user accounts, Sony said about 92 million can access the limited PlayStation network service.

TOKYO – Sony began restoring its PlayStation Network service in the United States and Europe on Sunday after shutting down the service almost a month ago due to a massive security breach affecting over 100 million online accounts.

Restored operations are mainly limited to online gaming, chat and music streaming services. Sony said it aimed to fully restore the PlayStation Network by the end of May.

Sony also began Sunday a phased restoration of its Qriocity movie and music services which share the PlayStation Network's server, said Sony Computer Entertainment Inc. spokesman Satoshi Fukuoka.

Limited services will also resume in Australia, Canada, New Zealand and the Middle East, and Sony said it will start restoring the service for users in Asia soon.

Sony's PlayStation network is a system that links gamers worldwide in live play. Sony shut it down on April 20 after discovering a hacker attack.

The network serves both the PlayStation video game machines and Sony's Qriocity movie and music services. It is a system that also allows users to upgrade and download games and other content.

Sony spokesman Sosuke Kamei said the company's probe into the hacker attack was ongoing. He declined to give details on the investigation.

Sony was under heavy criticism over its handling of the network intrusion. The company did not notify consumers of the breach until April 26 even though it began investigating unusual activity on the network from April 19.

Last month, U.S. lawyers filed a lawsuit against Sony on behalf of lead plaintiff Kristopher Johns for negligent protection of personal data and failure to inform players in a timely fashion that their credit card information may have been stolen. The lawsuit seeks class-action status.

Since the shutdown of the PlayStation Network on April 20, Sony's share price has dropped nearly nine percent to close at 2,241 yen ($28) on Friday.