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    6758   JP3435000009

SONY GROUP CORPORATION

(6758)
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Sony : shares slide 10 percent after dividend scrapped

09/17/2014 | 11:17pm EDT
Pedestrians are reflected in a logo of Sony Corp outside its showroom in Tokyo

TOKYO (Reuters) - Sony Corp shares fell more than 10 percent on Thursday in their biggest drop in more than 10 months after the Japanese consumer electronics maker announced deep losses in its smartphone business and scrapped its dividend for the first time since it listed in 1958.

The surprise axing of the dividend abruptly ended a 6-week rally that had lifted Sony's shares as much as 25 percent to their highest in more than a year, fuelled by rising confidence in the company's restructuring and its plans for the automotive sensor business.

Sony also said it would cut another 1,000 jobs in its struggling smartphone business, where it is up against fast-growing Chinese manufacturers as well as established names such as Apple Inc and Samsung Electronics.

"If the company were to go through further restructuring, it needs cash, so from this perspective, it makes sense that the company is not paying dividends," said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management.

Akino reckoned Thursday's slide in the stock price was overdone, but expected it to struggle until Sony gives more details on its restructuring when it announces its July-September results.

After the market close on Wednesday, Sony said it expects a 230 billion yen (1.3 billion pounds) net loss for the year ending on March 31, worse than its prior estimate of a 50 billion yen loss, reflecting an impairment charge for its smartphone division.

On Thursday morning, the shares tumbled to a 5-week low of 1,844 yen before managing a slight bounce to 1,914.5 yen, down 9.8 percent.

MOBILE PILLAR

Sony warned in July of a potential writedown in its mobile business, although the extent of the 180 billion yen charge was at the high end of some analysts' forecasts and raised the possibility of downward revisions in longer-term forecasts.

It also highlighted Sony's weakness in mobile, which it has designated as one of the three pillars of its future business along with games and imaging. Sony's growth strategy so far is leaning heavily on its PlayStation and the network services built around the video game workhorse, as well as its image sensor business.

The suspension of the dividend payment, which last year totalled 25 yen per share, also defies rising pressure on Japanese firms to pay closer attention to shareholders' interests.

Sony had already been expelled last month from a new index of 400 Japanese stocks selected on the basis of investor-friendliness, including return on equity which has typically been relatively low at Japanese firms.

A number of blue-chip companies in Japan have been increasing dividend payouts or moving to boost return on equity through share buybacks, as they come under pressure to deploy more of their cash to benefit shareholders.

(Reporting by Chris Gallagher, Ayai Tomisawa and Hideyuki Sano; Writing by Edmund Klamann; Editing by Ian Geoghegan)


ę Reuters 2014
Stocks mentioned in the article
ChangeLast1st jan.
SONY GROUP CORPORATION 0.16% 12360 End-of-day quote.20.18%
US DOLLAR / JAPANESE YEN (USD/JPY) 0.33% 110.172 Delayed Quote.5.77%
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Analyst Recommendations on SONY GROUP CORPORATION
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Financials
Sales 2022 9 773 B 88 783 M 88 783 M
Net income 2022 775 B 7 036 M 7 036 M
Net Debt 2022 469 B 4 260 M 4 260 M
P/E ratio 2022 19,8x
Yield 2022 0,51%
Capitalization 15 327 B 140 B 139 B
EV / Sales 2022 1,62x
EV / Sales 2023 1,48x
Nbr of Employees 109 700
Free-Float 98,2%
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Sony Group Corporation Technical Analysis Chart | 6758 | JP3435000009 | MarketScreener
Technical analysis trends SONY GROUP CORPORATION
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Income Statement Evolution
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Mean consensus BUY
Number of Analysts 19
Last Close Price 12 360,00 JPY
Average target price 15 089,47 JPY
Spread / Average Target 22,1%
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Managers and Directors
Kenichiro Yoshida Co-Chairman, President & Chief Executive Officer
Hiroki Totoki CFO, Director, VP & Head-Business Administration
Shuzo Sumi Co-Chairman
Toru Katsumoto Chief Technology Officer, Executive VP, Head-R&D
Tsuyoshi Kodera Head-Information Systems & Security
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