Sony profits rise on weaker yen, better Xperia sales

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Sony profits rise on weaker yen, better Xperia sales

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Sony’s chief executive Kazuo Hirai has announced a higher than expected first-quarter operating profit.

Earnings were boosted by strong demand for its Xperia smartphones in Japan as well as sales of image sensors to other handset makers.

The sharply weaker yen was also a contributory factor to net profit of 3.5 billion yen (26 million euros) in the quarter, that reversed a loss of almost 25 billion yen in the same period last year.

Hirai said they are still considering a proposal from activist shareholder Daniel Loeb who wants the company to spin off as much as one-fifth of the group’s money-making entertainment arm – covering movies, TV and music.

Loeb’s New York-based Third Point hedge fund believes that could bring better returns. The last quarter’s bump in profitability may not be enough to get him to back down.

Sony’s board is expected to reject Loeb’s proposals, the Nikkei newspaper said on Thursday, with directors arguing that the electronics giant can compete better by maintaining ties with the entertainment arm of the business.

The company’s TV business eked out 5.2 billion yen in operating profit in the first three months, the first time it has been in the black in 12 quarters.

It did not announce sale targets for the PS4 video game console.

Sony’s shares have more than doubled so far this year, buoyed by Third Point’s suggestions as well as Prime Minister Shinzo Abe’s potent mix of monetary and fiscal stimulus, which has fuelled a 33 percent rise on Tokyo’s benchmark Nikkei.