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Sony Looks to World Cup for Hope for a Dying Device: The TV

Stocks in this article: SNE

NEW YORK (TheStreet) -- The World Cup starts on Thursday, and it couldn't come soon enough to energize the sale of Sony's most famous product, the television.

Sony's (SNE) television unit could become profitable in the current quarter for the first time in more than a decade. That's very good news for a company that has been struggling to juggle its many parts, consumer electronics, a film studio, a music business and financial services.

Sony sales rose 30% in the first quarter to $2.15 billion. This rise in sales was spurred in part by the popularity of the Winter Olympics, and should receive a similar bounce from the World Cup, which begins June 12 in Brazil.

The uptick in TV sales marks a notable win for Sony, especially since television sales are likely to decrease over the next four years as more consumers turn to online video streaming, according to a report by Cisco.

Sony's profits are expected to be in-line with other television makers leading into the World Cup, Sandy Mehta, Principal and CIO of the Hong Kong-based consultancy, Value Investment Principals. "The entire TV food chain has seen an increase in preparation for the World Cup," Mehta said in a phone interview from Hong Kong. 

Samsung Electronics generated the highest sales this quarter with $9 billion increasing by 1% from a year earlier. The rest of the top five include LG Electronics, TCL, Sony and Hong Kong-based Skyworth Digital Holdings. Mehta disputed the notion that television sales couldn't continue to grow even with the increased popularity of streaming. 

"I don't think people are abandoning TV," Mehta said. "Sony's international market, including places like Asia, don't have the technology for video streaming in this market and will still demand TVs."

The announcement reveals some counter-intuitive results as Sony attempts to rebound from a projected sixth-loss in seven years.

CEO Kazou Hirai said at a press conference in Tokyo last month that the company's struggling TV unit can still become profitable for first time in more than a decade even if it misses a Wall Street consensus forecast for total television sales by as much as 16%. 

Mehta says the increase in television demand was due after such lengths were taken by the Minato-based company, "We were expecting an increase in sales," he said. "Management has been taking great pains to turn this around."

This success coming in the run-up to the World Cup reflects the potential growth projected for the industry by Cisco. As reported on Wednesday, Internet video to TV use by consumers will grow, increasing four-fold by 2018, Cisco said. According to the report, Internet video to TV traffic will be 14% of Internet video traffic by 2018, up from 11% in 2013.

On the day of the World Cup in Brazil, Sony shares were rising 1% to $16.15.

-Written by Kathryn Mykleseth in New York.

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