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By Masaki Kondo
Jan. 9 (Bloomberg) -- Shares of Sony Corp., the world's largest maker of video-game consoles, posted their biggest gain in a year after the company met its PlayStation 3 shipment target in the U.S. last year and affirmed a profit margin goal.
The stock gained 6.5 percent, the largest jump since Jan. 27, to 5,550 yen at the 3 p.m. close on the Tokyo Stock Exchange. Goldman, Sachs & Co. added the stock to its ``buy'' list because of Sony's TV sales over Christmas and its cheap valuation.
Sony shipped 1 million PlayStation 3s to the U.S. last year, after production delays and a battery recall helped limit gains in the shares to their smallest in 12 years. Game sales may help Chief Executive Officer Howard Stringer attain a 5 percent profit margin by March 2008, a goal he reiterated yesterday.
``Sony virtually had only bad news last year, so the CEO's comment and the rating change spurred a rally today,'' said Hiroshi Chano, who helps look after $7.3 billion at Yasuda Asset Management Co. in Tokyo.
Shares of Tokyo-based Sony gained 5.8 percent in 2006, compared with a 6.9 percent advance in the Nikkei 225 Stock Average. Yesterday was a national holiday.
Goldman's Tokyo-based analyst Yuji Fujimori raised Sony to a ``buy'' from ``neutral.'' He raised his 12-month share-price estimate to 6,200 yen from 5,150 yen.
Games Domination
Sony, which dominated the last round of game-console wars, is now in a three-way battle with Redmond, Washington-based Microsoft Corp., and Kyoto, Japan-based Nintendo Co. Sony delayed PlayStation 3's U.S. launch to November from a target of early 2006, and won't begin selling the machines in Europe until March because of a parts shortage.
The company still expects to ship 6 million PlayStation 3 consoles by March after diverting laser diodes meant for its Blu- ray DVD players.
``It appears everything is on track from a supply perspective,'' said Evan Wilson, a research analyst at Pacific Crest Securities in Portland, Oregon. ``Now, all we have to figure out is if the demand will live up to the supply.''
Nintendo's Wii outsold the PlayStation 3 two-to-one in Japan last year, Tokyo-based games research firm Enterbrain Inc. said in a statement today. Nintendo sold 989,118 units in Japan since the Wii launch on Dec. 2, while Sony sold 466,716 PlayStation 3 consoles since its Nov. 11 debut, Enterbrain said.
Nintendo, which forecast 4 million shipments worldwide by the end of last year, hasn't provided any holiday sales figures.
``We haven't decided yet when we will release the actual number of Wii's shipments,'' Yuka Tanegashima, a Kyoto-based spokeswoman, said earlier today.
Bravia Sales
Stringer, speaking at the Consumer Electronics Show in Las Vegas yesterday, reiterated the company's profit margin goal made in 2005. Sony's operating profit margin was 3.9 percent last year.
``I made a promise. I have to find a way to get there,'' Stringer said. ``I have some ideas where I can find the money.''
The company's electronics unit, which accounts for about two-thirds of the company's sales, will have an operating margin of 4 percent by the end of this fiscal year in March, Stringer said. The prediction excludes a 51.2 billion yen ($432 million) recall of its notebook-computer batteries.
Sony lowered its fiscal year net income forecast to a five- year low of 80 billion yen in October, after the battery recall and delays that hurt sales of the PlayStation 3 video-game console. Sony's sales have been aided by its best-selling Bravia liquid-crystal display televisions and the success of its film studio, No. 1 in 2006 U.S. ticket sales.
`Strong Holiday Sales'
Sony's electronics unit had ``strong holiday sales'' in the U.S., putting the company on course for a year of double-digit percentage growth, Stan Glasgow, president of Sony's U.S. electronics unit, said yesterday. Blu-ray sales won't be affected by the move to divert parts to the PlayStation 3, he said.
Microsoft said it sold 10.4 million units of its Xbox 360 in 2006, about a year after the console was introduced, beating a year-end target by 400,000.
To contact the reporter on this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net
Last Updated: January 9, 2007 01:49 EST
