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Investing

Sony’s (SNE) Money Machine

Photo of Douglas A. McIntyre
By Douglas A. McIntyre Published

The CFO of Sony (SNE) said to the FT that about 40% of its net profit in the June quarter came from a weaker-than-expected yen. Earnings were extremely modest anyway. The company made $540 million on revenue of almost $16.1 billion.

The disclosure opens the door for future ugliness in the company’s figures.

The yen now trades at about 118 per dollar. Sony is assuming that rate for its outlook on future earnings. The company hedges against currency risk, but if the yen drops toward 110 to the dollar, that hedging will probably not help it from taking an earnings hit.

It would be an irony if Sony could begin to turn around its PS3 sales and improve shipments of high-end TVs. Trouble in those areas has held Sony’s earnings back.

But, if the yen moves against Sony, and if games and TV units don’t turn around, earnings could move back toward zero.

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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