Sony Corp announced its first share buyback on Friday, worth 100 billion yen ($ 910 million), helping its shares rebound a bit from the hammering it received earlier in the week when the signing of Tech reported poor earnings.
The announcement marked Japan’s second major buyback this week, after tech investor SoftBank Group Corp said it would buy back 600 billion yen worth of shares on Wednesday, raising its share price.
Both stocks had been under pressure prior to the announcements reflecting investor concerns about the outlook for the global tech industry amid falling demand in China.
Sony said its buyback, its first goal to boost shareholder profitability, will be equivalent to 2.36 percent of its outstanding shares and will take place until March 22.
“Our financial health has improved enough to make the buybacks,” said a Sony spokesperson, adding that recent share prices were also a factor in their decision.
Hiroyasu Nishikawa, a senior analyst at IwaiCosmo Securities, said the buyback showed how much Sony had changed over the years, responding more to shareholders.
“This announcement was timely, and it shows that they are watching the market very well,” he said. “Sony has been gradually recovering in recent years.”
Until a few years ago, Sony had been battling losses as its consumer electronics business lost market share to its Asian rivals. Since then it has reinvented itself as an entertainment company with steady revenue from music and game content.
But its shares had tumbled 14 percent this week to their lowest level in more than a year after the company reported lower-than-expected earnings as its previously thriving gaming business gave way, though an extraordinary gain related to its acquisition of EMI, however, pushed its quarterly profit to an all-time high.
Sony also lowered its earnings outlook for image sensors, citing weakness in the global smartphone market.
The repurchase announcements also come as Japanese companies have increased share buybacks amid growing demands for higher returns from shareholders. Instrument maker Yamaha Corp and trading company Itochu Corp also announced buybacks along with their quarterly earnings last week.
Sony has been steadily increasing shareholder returns through higher dividends in recent years. It paid 7.09 percent of its earnings in dividends in the last fiscal year, compared with 22.5 percent for US tech giant Apple Inc, according to data from Refinitiv.
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