Sony Corp. (6758)’s record of underperforming its own targets may lead to more disappointment while forecasts of rival Panasonic Corp. (6752) are seen remaining the most accurate from Japanese electronics makers.
The CHART OF THE DAY compares initial annual operating profit targets of Japan’s two largest electronics makers by value with their actual results starting from the fiscal year ended March 2009 and Jefferies Group LLC estimates for this year. Sony missed its forecast half the time, including an 88 percent gap last year, while Panasonic has failed to deliver just once, according to data compiled by Bloomberg.
Sony has the worst record of predicting performance among the 30 largest companies in the Topix Electric Appliances Index since 2002, and Panasonic is the best, according to Jefferies analyst Atul Goyal. The maker of Xperia smartphones is predicting an operating profit of 140 billion yen ($1.4 billion) this year as President Kazuo Hirai vows to end losses from making TVs, a promise he couldn’t keep the past two years.
“Sony’s track record for missing their guidance is unparalleled, they have traditionally overpromised and underdelivered,” Goyal, who expects Sony to match its forecast this year, said in a phone interview. “Panasonic has a beautiful track record of revising upward.”
Goyal, who has a buy rating on Sony, said the appointment of Kenichiro Yoshida as chief financial officer in April may offer a break from the past of missing forecasts as the CFO requires more accountability. Although Sony’s entertainment and financial units beat targets, in electronics “our response to the rapidly changing and fiercely competitive operating environment has been neither deep, nor nimble enough,” Hirai said on a May 22 conference call.
Panasonic is expected to beat this year’s forecast, according to all five estimates compiled by Bloomberg in the past 28 days, while just 9 of 16 analysts expect Sony to outperform. The last time Sony beat its target was in the 12 months ended March 2013, after selling its 37-story New York headquarters for $1.1 billion, and it revised earnings downward three times last year.
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