Sony (SNE) Stock Retreating Today Amid Movie Controversy, Obama Comments

NEW YORK (TheStreet) -- Shares of Sony Corp. (SNE) are lower by 2.55% to $20.60 in mid-afternoon trading on Friday, as CNBC.com reports that the FBI has said North Korea is responsible for the hack against the movie studio.

The FBI said that they have gathered enough information and are able to conclude that North Korea was behind the security breach.  

North Korea's hack was likely in response to the company's film, which stars James Franco and Seth Rogen as journalists hired by the CIA to assassinate North Korea's leader Kim Jong-Un, during an interview.

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Sony has canceled the release of "The Interview". President Obama called the move "a mistake" today during his year end address, CNBC.com added.

The president said that he wished Sony had come to him before making the decision to pull the movie.

"Sony's a corporation that suffered significant damage, there were threats against its employees," Obama said, CNBC.com noted. "I am sympathetic to the concerns that they faced, but having said all that, yes, I think they made a mistake."

Separately, TheStreet Ratings team rates SONY CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate SONY CORP (SNE) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • The current debt-to-equity ratio, 0.43, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that SNE's debt-to-equity ratio is low, the quick ratio, which is currently 0.59, displays a potential problem in covering short-term cash needs.
  • SNE, with its decline in revenue, slightly underperformed the industry average of 10.4%. Since the same quarter one year prior, revenues fell by 12.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • SONY CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, SONY CORP swung to a loss, reporting -$1.22 versus $0.30 in the prior year. For the next year, the market is expecting a contraction of 27.0% in earnings (-$1.55 versus -$1.22).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Household Durables industry. The net income has significantly decreased by 531.9% when compared to the same quarter one year ago, falling from -$199.43 million to -$1,260.14 million.
  • You can view the full analysis from the report here: SNE Ratings Report

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