Sony Corp. shares jumped 9.1 percent in Thursday morning trading, a day after the Japanese electronics and entertainment company released upbeat earnings that included a record fiscal year profit.
Sony stock was trading at 5,290 yen ($50) as the market welcomed the strongest sign in years of the Tokyo manufacturer's path to recovery. Sony has taken a beating in recent years after falling behind rivals in digital music players and flat-panel TVs.
A global plunge in gadget prices and the enormous startup costs for the struggling PlayStation 3 video game console have also taken their toll on the company's performance.
"The report underlines Sony's confidence in the steady progress of its reforms," Nomura Securities Co. said in a report, noting that it was "positive" that the company is promising better operating profit for the fiscal year through March 2009 despite a strong yen.
Sony said it is expecting the dollar to trade at about 100 yen during the current fiscal year.
Sony forecast a 21.5 percent drop in net profit for the fiscal year through March 2009 because the strong yen will erode the value of its overseas earnings.
But it said it will become profitable in the money-losing PlayStation 3 and TV operations, projecting fiscal year sales to climb 1 percent to 9 trillion yen ($85.7 billion) and operating profit to improve 20 percent.
Sony swung to a profit for the January-March quarter from a loss a year ago on its way to a record performance for the fiscal year as it reduced losses from its PlayStation 3 video game business.
Strong sales of flat panel TVs and digital cameras also helped nearly triple annual profit compared with the previous financial year, with the yearly earnings coming in at 369.4 billion yen ($3.5 billion yen).
Nomura said it expects Sony to survive the unfavorable currency swing to a 100-yen dollar and expressed optimism for profit growth in liquid crystal display TVs.
Sony has ended unprofitable units, sold assets, trimmed jobs and forged joint ventures to reshape its business to boost profitability.
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