Sony (SNE) Expecting 'Huge Impact' on Earnings from This...
Tweet
Share
E-mail
Get Alerts SNE Hot Sheet
Join SI Premium – FREE
Even electronics giant Sony (NYSE: SNE) can't escape the impact from the weakening euro.
According to reports Thursday, Sony is expecting a "huge impact" on it's earnings as the euro continues its descent.
While Asian suppliers settle in dollars, Sony doesn't buy many components from Europe, limiting its ability to hedge against the euro. Sony Corporate Treasurer Hiroshi Kurihara said there "are no countermeasures that we can take for the moment... there is a huge impact to our earnings."
With the euro slumping to a decade low against the yen, Sony is ceding some exports to South Korea-based competitor Samsung Electronics, which has seen the won trend lower over the last several weeks.
Sony last forecast fiscal operating profit of about ¥200 billion ($2.6 billion), but that figure assumed the euro trading at 115 yen or so. As of recent, the euro has slipped to 104.3, about 9.3 percent lower than anticipated for the quarter.
All hope may not be lost for Sony, however. Wednesday, Democratic Party leader Seiji Maehara suggested Japan set up a sovereign wealth fund to help stem high yen and sell assets in order to reduce tax increases on it's quake reconstruction fund. According to the WSJ, Japan's Prime Minister Yoshihiko Noda said he'd consider it.
Sony is trading flat Thursday morning.
According to reports Thursday, Sony is expecting a "huge impact" on it's earnings as the euro continues its descent.
While Asian suppliers settle in dollars, Sony doesn't buy many components from Europe, limiting its ability to hedge against the euro. Sony Corporate Treasurer Hiroshi Kurihara said there "are no countermeasures that we can take for the moment... there is a huge impact to our earnings."
With the euro slumping to a decade low against the yen, Sony is ceding some exports to South Korea-based competitor Samsung Electronics, which has seen the won trend lower over the last several weeks.
Sony last forecast fiscal operating profit of about ¥200 billion ($2.6 billion), but that figure assumed the euro trading at 115 yen or so. As of recent, the euro has slipped to 104.3, about 9.3 percent lower than anticipated for the quarter.
All hope may not be lost for Sony, however. Wednesday, Democratic Party leader Seiji Maehara suggested Japan set up a sovereign wealth fund to help stem high yen and sell assets in order to reduce tax increases on it's quake reconstruction fund. According to the WSJ, Japan's Prime Minister Yoshihiko Noda said he'd consider it.
Sony is trading flat Thursday morning.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Baird on Nurix (NRIX) Earnings Amid 7% Drop: '2Q Print Solid as Breadth of Development Expands'
- Ategrity reports record Q2 results, names new CFO
- Barclays upgrades CubeSmart, cuts Public Storage on relative valuation
Create E-mail Alert Related Categories
Corporate News, Insiders' BlogRelated Entities
EarningsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
