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More changes in store for Sony, incoming CEO says

Sony Corp.'s newly announced leadership transition is a prelude to more changes at the company, which sees "urgency" in enhancing its competitiveness on a global scale, executives said during a Feb. 2 earnings call after raising guidance for full-year fiscal 2018.

The Japanese electronics and entertainment giant announced earlier the same day that CEO Kazuo Hirai, who had led a turnaround at the company, would hand the reins to CFO Kenichiro Yoshida, effective April 1.

"I'm also considering other executive appointments and organizational changes beyond those announced today," Yoshida said on the call. "We will update you on these changes once they have been finalized."

Yoshida plans to present details of Sony's future direction at its next corporate strategy meeting scheduled to be held soon after the announcement of full-year fiscal 2018 earnings, which is set for late April.

Hirai said on the call that the timing of the handover is "ideal," as the company also prepares to embark on its third midrange plan in April. Hirai, who will become chairman of Sony following the leadership transition, said he will support Yoshida in the management team and be ready to provide advice regarding the games business or the entertainment or network segments.

Ahead of the call, Sony reported a net profit surge of nearly ¥286 billion to ¥314.89 billion for the fiscal third quarter ended Dec. 31, 2017, and revised its fiscal 2018 attributable net income guidance upward by 26.3% to ¥480 billion.

Changed environment

Yoshida said that although he is "pleased" with the company's expectation of exceeding targets and achieving the highest profit in 20 years during the final year of its second midterm corporate plan, it also signifies that Sony has been unable to surpass itself for the past two decades.

"During this period, the global business environment surrounding Sony has changed drastically. Although we are now able to forecast the return to record profit levels, our position in the global market is still very different to where we were 20 years ago," he said.

"Mr. Hirai and I both share a great sense of urgency regarding the need for us to enhance our competitiveness as a global company."

Yoshida also said Sony sees "pressing challenges" in how to monetize its "greatest strength" of resonating with customers globally, and maximizing its diverse array of employees across a range of businesses.

Meanwhile, several of the company's business segments are seeing market risks. The mobile communications segment posted a 13% sales decrease during the fiscal third quarter, primarily due to a drop in smartphone unit sales, Yoshida said.

He added that the company lowered its forecast for annual smartphone sales by 1.5 million units to 14 million units, and now expects full-year sales and operating revenue of ¥740 billion, compared to the forecast of ¥780 billion made in October 2017.

In addition, Sony reduced its full-year sales forecast for the semiconductor segment to ¥850 billion from the previous guidance of ¥880 billion in October 2017, due to a decrease in unit sales of image sensors for mobile products shipped to the Chinese market, where it sees a contraction.

The group's other segments — including games and network services, music, pictures and home entertainment and sound — saw positive sales growth for the fiscal third quarter.

As of Feb. 1, US$1 was equivalent to ¥109.45.