For those who follow the madness of Wall Street and how the stock market goes, you’re used to the following scenario. Company announces a certain forecast for the quarter and depending on how close they get to that number and or beat it, Wall Street reacts in some absurd way. When it comes to earnings reports, most companies tend to give guidance well in advance and adjust (usually downward) as the quarter comes to a finish. This is especially true in the highly competitive tech sector where new products are introduced weekly and consumer direction is hard to gauge. A clear case can be found for Nintendo who, despite cutting their sales forecast for the Wii U by half, only managed to sell half of their own projections this quarter. So with that as a back drop, it came as a surprise to many when Sony announced that they will be revising their 2012 earnings forecast and reporting their net profits doubling for the year.

Sony is reporting that by selling its NYC HQ for $1.1 billion and Sony City Osaki building for $1.2 billon, in conjunction with a weakening yen, the company has been able to double its net profit. This takes the company from a 20 billion yen net profit to 40 billion yen ($403 million). This marks the first real profit on Sony’s balance sheet since 2008. While a good sign for investors despite its artificial nature, the real challenge for Sony will be to replicate and surpass this success during the 2013 calendar year when there is no more assets left to sell. At that time, a meaningful picture can be painted of Sony’s financial health and strength and or weakness in the consumer market. So far in 2013, Sony has cut the price of the PlayStation Vita in Japan which has resulted sales for the powerful portable to double while the PlayStation 4 is expected to launch world wide this Fall. Sony has also completely revamped its 2013 line of Bravia televisions and released the Xperia Z to much praise. Sony will announce its full 2012 earnings report on May 9th.

Discuss:

Do you think Sony is headed towards recovery or are there still major challenges ahead for Sony?e

[Via Reuters]