Sir Howard Stinger has done it. Sony’s (SNE) stock has not been this high in almost five years. But, that means that the stock is simply back to where it was five years ago, and is flat, while the S&P is up about 30%.
Stinger improved the yield from the company’s electronics division, which sell products like TVs, and he jacked up the results from the company’s studio. Perhaps most important, he sharply cut losses at Sony’s game unit. But, that part of the company is still forecast to lose another $454 million in the current fiscal year. That is based on selling 11 million PS3 units. And, that may not happen.
US April sales of PS3 were really awful. NPD, a research firm that tracks these kinds of things, says that PS3 sales for the month hit only 82,000 units. Sales of the Nintendo Wii were 360,000. Sales of the Xbox 360 console were 174,000. Industry experts think it will take a sharp price cut to make PS3 sales rise.
There is nothing wrong with Sony’s projection for game console sales over the next year, except for the fact that they are only a projection. And, early polling would indicate that they could be wrong.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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