Sony’s stock is swooning amid worries its portfolio ‘is in trouble’

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A woman plays ASTRO BOT Rescue Mission at a Playstation VR display at the Sony Exhibit at the Las Vegas Convention Center during CES 2019 in Las Vegas on January 9, 2019.

Investors are running for cover after Sony delivered its latest results and guidance: Shares in the Japanese tech giant tumbled 8 percent in Monday trade.

Underlying that one-day move is a concern that the company’s portfolio “is in trouble,” according to one analyst.

The company is in “highly competitive areas with declining unit sales and margin,” Ray Wang, principal analyst and founder at Silicon Valley-based Constellation Research, told CNBC over email.

“They have a bad hand and need to change … their portfolio,” Wang said.

Wang’s comments came on the back of Sony cutting its sales and operating revenue forecast for the fiscal year. In particular, investors are closely watching the firm’s gaming business. That division is the largest contributor to the company’s operating income, comprising more than 30 percent in the first three quarters of Sony’s fiscal year.

The company sold 8.1 million units of its flagship PlayStation 4 (PS4) gaming console in the third quarter, according to its earnings release. That was lower than the same quarter of the previous fiscal year, but “in-line with (the company’s) expectations for this sixth year of the platform,” Sony Chief Financial Officer Hiroki Totoki said at a Friday earnings briefing.

Slowing sales of PS4 hardware and a negative impact from foreign exchange rates outweighed an increase in game software sales to drag down the segment’s operating income as compared to the previous year, according to Totoki.