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Sony’s Revenue and Income Rose in 3Q15

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Price movement of Sony

Sony (SNE) has a market cap of $29.8 billion. SNE rose by 17.7% to close at $23.88 per share as of January 29, 2016. The price movement on a weekly, monthly, and year-to-date (or YTD) basis is 9.8%, -3.8%, and -3.0%, respectively.

At times, the stock has broken the support of all moving day averages. Currently, SNE is trading 5.7% above its 20-day moving average, 1.9% below its 50-day moving average, and 12.7% below its 200-day moving average.

The Vanguard FTSE Pacific ETF (VPL) invests 0.56% of its holdings in Sony. The ETF tracks the FTSE Developed Asia Pacific Index, a market-cap-weighted index of securities in the developed markets of the Pacific region. The YTD price movement of VPL is -7.9% as of January 28, 2016.

The Vanguard FTSE Developed Markets ETF (VEA) invests 0.22% of its holdings in Sony. The ETF tracks a market-cap-weighted index of large-cap and mid-cap stocks from developed markets outside the US, dynamically transitioning to include small caps and Canadian stocks.

The market caps of Sony’s competitors are as follows:

  • Canon (CAJ): $37.2 billion
  • Harman International Industries (HAR): $5.3 billion
  • Dolby Laboratories (DLB): $3.6 billion
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Performance of Sony in fiscal 3Q15

Sony reported fiscal 3Q15 sales and operating revenue of 2,580.8 million yen, a rise of 0.55% compared to sales and operating revenue of 2,566.7 million yen in fiscal 3Q14. Sales and operating revenue from mobile communications, imaging products and solutions, home entertainment and sound, and devices fell by 14.7%, 5.0%, 4.3%, and 12.6%, respectively. However, sales and operating revenue of game and network services, pictures, music, and financial services rose by 10.5%, 26.9%, 8.2%, and 5.6%, respectively, in fiscal 3Q15 compared to fiscal 3Q14.

The company’s net income and EPS (earnings per share) rose to 120.1 million yen and 93.33 yen, respectively, in fiscal 3Q15, compared to 90.0 million yen and 76.96 yen, respectively, in fiscal 3Q14.

Meanwhile, its cash and cash equivalents and inventories rose by 14.9% and 11.5%, respectively, in fiscal 3Q15 compared to fiscal 4Q14. Its current ratio rose to 0.95 in fiscal 3Q15, and its debt-to-equity ratio fell to 4.0 in fiscal 3Q15, compared to a current ratio and a debt-to-equity ratio of 0.88 and 4.4 in fiscal 4Q14.

On January 26, 2016, Sony entered into an agreement with Altair Semiconductor and its shareholders to acquire the company. The purchase price is $212 million and the company expects to close the acquisition by February 2016.

The company’s PE (price-to-earnings) and PBV (price-to-book value) ratios are 34.1x and 1.3x, respectively, as of January 29, 2016.

Projections

The company has made the following projections for fiscal 2015:

  • sales & operating revenue of 7,900 billion yen
  • operating income of 320 billion yen
  • income before income taxes of 345 billion yen
  • Net income of 145 billion yen
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