(Reuters) - Sony's Pictures Entertainment will produce fewer films going forward, making a "significant shift from motion pictures to higher margin television production and networks," Sony Corp executives told investors gathered at the company's Culver City, California studio lot.
The company's projections come as Sony is battling to win investor support after a letter from hedge fund investor Daniel Loeb in May calling on Sony to spin off to investors a portion of its entertainment business and take steps to improve the studio's profitability.
Sony Entertainment CEO Michael Lynton said the studio has identified $250 million in overhead and procurement cost cuts that it expects to make in the next two or three years. The studio is also working with a "third party" - identified in prior media reports as Bain & Co - to identify further cuts, he said.
Lynton forecast that the company's pictures business, which includes its film and television operations, will have revenues of $8.4 billion in fiscal year ending March 2015, and an operating margin of 7.4 percent. In its music business, the company expects revenue of $4.8 billion and 9.5 percent in operating income margins.
The company, which promised greater transparency to Loeb, reported more detailed numbers for its entertainment businesses than it had done in the past.
Loeb's Third Point owns about 7 percent of Sony Corp.