)
As a slew of big-name Japanese companies report improved quarterly earnings, one theme is taking the sheen off their rosy numbers: mainstay businesses are still struggling despite the perk from a weaker yen.
The latest example came today from Sony Corp. The Japanese electronics and entertainment company reported a 3.5 billion yen ($35 million) April-June profit, a reversal from the 24.6 billion yen loss it suffered the previous year.
Sony also saw some improvement in its smartphone and entertainment businesses. But it still had plenty of areas where it was lagging, such as digital cameras, video game machines and flat panel TVs. Its results would have been far different if it weren't for the favorable exchange rate.
A weak yen boosts the earnings of Japanese exporters, although Sony has been trying to reduce its vulnerability to exchange rate fluctuations in recent years when the yen was high.
Quarterly sales jumped 13% to 1.71 trillion yen ($17 billion). But they would have slipped 3% if it weren't for the declining yen, the Tokyo-based company said. In its electronics unit, Sony gained 19 billion yen ($190 million) in operating profit from a cheap yen.
Other Japanese companies whose earnings fared better largely on a cheap yen included video-game maker Nintendo Co., automaker Honda Motor Co. And Sony's domestic archrival Panasonic Corp.
Their test lies in how they hold up in global competition, even without the benefits of a cheap yen.
Daniel Loeb, a US hedge fund manager renowned for shaking up Yahoo Inc., sparked a rise in Sony's share price by proposing a spin off up to 20% of its movie, TV and music division. He says the money should be used strengthen Sony's ailing device manufacturing unit.
Sony has said it is considering the proposal from Third Point hedge fund, led by activist investor and billionaire Loeb, but it has also asked for more time to look at all sides. Sony shares have risen after the Loeb proposal.
Also helping Sony's bottom line for the latest quarter was its financial business, such as insurance, because of a recent recovery in the Japanese stock market, it said.
