Sony Corp cut its annual profit outlook due to losses related to the sale of its battery business - disappointing a market that had been hoping for an upward revision on buoyant sales momentum for PlayStation 4 and the launch of its virtual reality headset.
Emerging from years of restructuring, the consumer electronics giant is refocusing its business to concentrate on videogames, entertainment and camera sensors and the sale of its battery business was part of that effort.
But while the sale to Murata Manufacturing Co had been flagged in July, its impact on earnings appeared to be greater than expected.
Sony now expects to post JPY 270 billion ($2.6 billion or roughly Rs. 17,175 crores) in operating profit for the year ending in March, down JPY 30 billion from its previous forecast made in July and an 8 percent decline from the previous year.
It also falls short of a Thomson Reuters Starmine SmartEstimate of JPY 308.65 billion (roughly Rs. 19,623 crores) derived from 27 brokerage estimates.
Analysts have been hopeful that brisk sales of PlayStation 4 gaming consoles and software titles would boost profits and that this would only improve with upgraded versions of the console during the year-end holiday shopping season.
(Also see: PlayStation VR: Almost There but Not Just Yet)
Sony said on Monday it has agreed to sell its battery business for about JPY 17.5 billion and expects to book an impairment charge of JPY 33 billion related to the sale.
It will announce its first-half results and further details of its full-year outlook on Tuesday.
© Thomson Reuters 2016