SONY UNVEILS 100B YEN BUYBACK
Move, equivalent to 2.36pc of outstanding shares, is to boost shareholder returns
SONY Corp announced its first-ever share buyback yesterday, worth 100 billion yen (RM3.71 billion), helping its stock recover somewhat from the hammering it received earlier in the week when the technology firm reported lacklustre earnings.
The announcement marked Japan’s second major buyback this week after technology investor SoftBank Group Corp said it will repurchase 600 billion yen worth of stock on Wednesday, sending its share price soaring.
Both stocks had been under pressure prior to the announcements reflecting investor unease over the outlook for the global technology industry amid falling demand in China.
Sony said its buyback, its firstever aimed at boosting shareholder returns, will be equivalent to 2.36 per cent of its outstanding shares and will be conducted through March 22.
Hiroyasu Nishikawa, an analyst at IwaiCosmo Securities, said the buyback showed how much Sony had changed over the years, responding more to shareholders.
Until a few years ago, Sony had been struggling with losses as its consumer electronics business lost market share to Asian rivals. It has since reinvented itself as an entertainment company with stable revenue from music content and gaming.
But its shares had plunged 14 per cent this week to their lowest in more than a year after the company reported lower-than-expected profit as its previously thriving gaming business sagged — though a one-off gain related to its acquisition of EMI nevertheless pushed the quarterly result to a record high.
Sony also cut its profit outlook for imaging sensors, citing weakness in the global smartphone market.
The buyback announcements also come as Japanese companies have been increasing share repurchases amid growing calls for higher shareholder return. Instruments maker Yamaha Corp and trading house Itochu Corp also announced buybacks along with their quarterly earnings in the past week.
Sony has been steadily increasing shareholder return through higher dividends over the last couple of years. It paid 7.09 per cent of its profit in dividend in the last fiscal year, compared with 22.5 per cent at UApple, according to Refinitiv data.