TOKYO — Sony, Japan’s long-troubled electronics and entertainment giant, doubled its annual net profit estimate Thursday, citing a weaker yen, sales of noncore assets and a recent stock rally that has bolstered its insurance business.
Sony said it expected to book a net profit of ¥40 billion, or $404 million, for the financial year that ended March 31, compared with an estimate it made in February of ¥20 billion. The Tokyo-based company also raised its sales estimate to ¥6.8 trillion from an earlier forecast of ¥6.6 trillion. The previous year, the company reported a ¥260 billion net loss on ¥7.2 trillion in sales.
Sony’s brightening fortunes underscore how the aggressive monetary easing pursued by the government of Prime Minister Shinzo Abe and the Japanese central bank are galvanizing exporters in the world’s third-largest economy, after those of the United States and China. Analysts predict larger profits this earnings season as the country’s top exporters bask in the effects of a yen that has weakened by almost 20 percent since Mr. Abe took office in late December, thanks to a huge injection of money into the Japanese markets.
A weak yen can bolster Japanese exporters by making their products more price-competitive overseas, or inflating the value of their overseas earnings. The reverse had been true for the country’s exporters since 2008, as the yen — considered an investing haven during times of turmoil — strengthened considerably.
Now the yen is unwinding, and more quickly than most experts or companies expected. Sony said it had assumed foreign exchange rates for the fourth quarter of ¥88 to the dollar and ¥115 to the euro. Instead, those rates were ¥92 to the dollar and ¥122 to the euro.
Sony’s asset sales — including office buildings in Tokyo and New York, and a health care data provider — also helped lift Sony’s bottom line. Sony’s life insurance unit benefited from a stock market rally that improved investment performance.
Sony reports official results for the just-ended fiscal year on May 9. Its shares have risen almost 70 percent during the past six months, beating a 54 percent rise in the Nikkei 225-share index.
With its robust profit forecast, Sony is set to join a flurry of exporters reporting stellar earnings. Also Thursday, the industrial giant Mitsubishi Heavy Industries said its annual net profit was likely to total ¥97.3 billion, far higher than a previous forecast of ¥70 billion and a fourfold increase from a year earlier. On Wednesday, Canon raised its net income projection for the past fiscal year, despite slashing its sales target 15 percent because of sluggish sales of its digital cameras.
Economists at UBS said in a recent report that they expected the weakening yen to remain “a critical driver” of increased profits for Japanese companies in the current fiscal year. The economists estimate nearly 50 percent earnings growth in Japan for the financial year ending March 2014.
Still, for some struggling exporters, the effects of the weak yen have not been enough to start a recovery. Nintendo, the video game company, posted a smaller-than-expected annual profit of ¥7.1 billion Wednesday, thanks to disappointing sales of its Wii U home consoles and 3DS portable machines.
At Sony, it remains unclear how much the company can leverage its improved finances to revive its consumer electronics business, which has lost ground to rivals like Apple and Samsung. Sony is pushing to make bigger inroads in the smartphone market with sleek models like the Xperia. It is also set to release the PlayStation 4, its next-generation home game console, this holiday season.
