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Sony Chief Asks for Investors’ Patience

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From Bloomberg News

Sony Corp.’s Nobuyuki Idei, the chief executive who has presided over a 29% decline in his company’s stock this year, asked for patience from shareholders demanding improvements at the firm’s electronics unit.

Meeting individual shareholders Friday for the first time since Sony reported a fiscal fourth-quarter net loss of $938 million in April, Idei defended his performance.

Idei, best known as the architect of Sony’s high-speed Internet strategy, told shareholders that his blueprint is to link Sony’s products over the Web, providing a conduit to deliver a steady stream of music and movies.

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“We want you to wait a little bit more,” Idei said. “We are trying with strong determination to achieve 10% [operating] profit margins toward 2006.”

Some shareholders say they are tired of waiting and would prefer more action than vision.

“We’re not here to listen to your vision,” one shareholder said. “We are here to see results of what you have done and to see if Sony is a worthy investment. We can’t make a decision based on your explanation.”

Other shareholders pointed to dismal results from sales of electronics. In the last fiscal year, profit margins on sales of audiovisual products such as Wega TVs and Vaio personal computers stood at a slim 0.84%.

“The profit margin at the electronics business is below 1%, and this is way too low,” another shareholder told Idei.

The atmosphere at the meeting was markedly different from last year’s, when Sony rolled out short clips from the hit film “Spider-Man.” The movie generated more than $815 million in sales at theaters worldwide, becoming Sony’s best-performing picture and lifting the company’s movie business to record earnings.

But Sony’s investments in Hollywood -- and even its offering of financial services -- have drawn criticism from some shareholders that the company’s operations are too sprawling.

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Sony’s shares plunged 27% in the two days in April after the company surprised investors with a quarterly loss that was almost triple what analysts had been expecting.

On Friday, Sony’s New York Stock Exchange-traded shares slipped 1 cent to $29.48.

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