Sony’s U.S.-traded shares touched a 52-week high this morning after CEO Kazuo Hirai reiterated his support for the entertainment business. He unveiled ambitious new revenue and profit targets—along with additional cost cutting—for the fiscal year ending March 2018.
Entertainment “is an extremely important part of Sony,” he told an investor meeting in Tokyo, Bloomberg reports. “While it may seem like electronics is Sony’s main business and entertainment a sideline occupation, the entertainment business has been profitable for 18 straight years, delivering steady earnings.”
With help from its PlayStation game operation and Spider-Man sequels, Sony now projects that sales for the movie and TV Pictures segment will rise as much as 36% to $11 billion in the 2018 fiscal year vs the one that ending in March 2015. The company expects the operating margin to grow to as much as 8% from 6.6%. The profit forecasts include $50 million in “targeted overhead and procurement savings” on top of the $250 million Sony announced a year ago. The cuts will be “fully implemented” by March 2016.
Sony says sales at the Music segment could rise 8.3% over the three year period, with operating margins flat at about 10%.
Hirai has a personal stake in the success of Pictures and Music: Last year he rejected a proposal from Third Point’s Daniel Loeb to spin off a minority interest in the entertainment businesses. The hedge fund manager recently unloaded his Sony shares, telling his investors that the struggling electronics and entertainment giant has “a long way to go and we continue to believe that more urgency will be necessary to definitively turn around the company’s fortunes.” Early this year Sony sold its PC business, and announced plans to spin off TV manufacturing. (Loeb is an investor in Variety with Deadline’s parent company, PMC.)