Sony slashing jobs, leaving unprofitable businesses

[NJ5]

MontanaHatchet said:

NJ5 said:

MontanaHatchet said:
Well if there was ever a time to buy some Sony stock, seems to be me that it would be now.

Actually their stock went up after these news. I wouldn't touch their stock with a 10-foot pole, I think we've only seen the tip of the iceberg.

 

Well their stock went up since they managed to put a positive spin on the story (a better tomorrow for Sony!). But I still don't see what you mean by "the tip of the iceberg." What are you referring to?

 

Well here are some examples from analysts today:

"The number sounds big, but this staff reduction won't be enough," said Katsuhiko Mori, a fund manager at Daiwa SB Investments.

"Sony doesn't have any core businesses that generate stable profits - the next thing we want to see is what is going to be the business that will drive the company."

"There's nothing in the announcement about the speed at which the company will carry out the cuts or how positive they will be for earnings next fiscal year," says Mizuho Investors Securities (8607.T) analyst Nobuo Kurahashi.

Another thing that strikes critics as odd: Sony has yet to revise the ambitious three-year agenda of financial targets and product launches that it announced with much fanfare less than six months ago. So far, the company is sticking by its goals for a return on equity of 10% within three years, from 8.6% last year.

The cuts left analysts wondering what products Sony will rely on for future growth. The company's LCD TVs are a huge revenue source for the electronics division but have yet to turn a profit, and Sony officials are now downplaying expectations for a turnaround this fiscal year. "And what of the other divisions, such as video games?" says S&P's Kobayashi.

Sources:

http://news.bbc.co.uk/2/hi/business/7772597.stm
http://www.businessweek.com/globalbiz/content/dec2008/gb2008129_569144.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis