AP Business Writer
LOS ANGELES (AP) -- Sony Entertainment, the movie and music arm of Sony Corp., is looking to cut at least $100 million in costs and has hired consulting firm Bain & Co. to conduct a review of its operations.
That's according to a person familiar with the matter who wasn't authorized to speak publicly about it since the review is not complete. The person spoke on condition of anonymity.
The review comes as Sony prepares to discuss its entertainment business with investors in a push to become more transparent as a company.
Sony CEO Kazuo Hirai and Sony Entertainment CEO Michael Lynton are to speak to investors at the Sony Pictures lot in Culver City, Calif., on Thursday in an event that will be webcast. They will be accompanied by the top executives from the music and television divisions.
The push to squeeze more efficiency from its entertainment division comes after hedge fund Third Point LLC took a $1.1 billion stake in Sony this year and became its largest shareholder.
On May 14, Third Point CEO Daniel Loeb called on Sony in a public letter to partially spin off Sony Entertainment with a share offering that would increase focus on its profitability.
Hirai rebuffed the suggestion, but in a letter he released publicly in August, he said "we recognize that our (profit) margins should be higher."
Third Point has subsequently cut its stake to about 17 million shares for a 1.6 percent stake in Sony as of the end of September, according to S&P Capital IQ. At the time of his letter, Loeb said the company had 64 million shares.
Since Loeb's letter, Sony's U.S.-traded shares are down 10 percent, closing Monday at $18.72.
The review comes after a weak quarter for the studio. In the three months through September, the movie studio lost about $181 million, which it blamed on box office disappointments such as "White House Down." Revenue rose 9 percent to $1.82 billion, primarily driven by the acquisition of a British TV show production company.
Music division profits rose 24 percent in the quarter to $99 million, while revenue was up 16 percent to $1.17 billion thanks to a weaker yen and hit albums like Justin Timberlake's "The 20/20 Experience."
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