The CFO of Sony (SNE) said to the FT that about 40% of its net profit in the June quarter came from a weaker-than-expected yen. Earnings were extremely modest anyway. The company made $540 million on revenue of almost $16.1 billion.
The disclosure opens the door for future ugliness in the company’s figures.
The yen now trades at about 118 per dollar. Sony is assuming that rate for its outlook on future earnings. The company hedges against currency risk, but if the yen drops toward 110 to the dollar, that hedging will probably not help it from taking an earnings hit.
It would be an irony if Sony could begin to turn around its PS3 sales and improve shipments of high-end TVs. Trouble in those areas has held Sony’s earnings back.
But, if the yen moves against Sony, and if games and TV units don’t turn around, earnings could move back toward zero.
Douglas A. McIntyre
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