Sony Annual Film Profit Down 1.6 Percent, Movies Partially Offset by TV

12:16 AM PST 05/14/2014 by Gavin J. Blair
Columbia Pictures
"After Earth" was one of the underperforming titles that hit Sony Pictures' profitability for the year

After hits like "Skyfall" and "The Amazing Spider-Man" in the previous year, the film arm was hit by the flops of "After Earth" and "White House Down," partially offset by stronger TV results.

TOKYO – Sony Corp.'s film unit on Wednesday posted a full-year operating profit of $501 million (¥51.6 billion), down 1.6 percent from $509 million in the previous year, but up 8 percent in yen - driven by the weakening of the Japanese currency against the U.S. dollar.

The result came on a 13.2 percent revenue gain for Sony Pictures in yen, or a 6 percent drop on a constant dollar basis, to $8.05 billion (¥829 billion), with the weak yen again playing a key role.

Following the blockbuster hits of Skyfall and The Amazing Spider-Man in the previous financial year, Sony Pictures had major flops including After Earth and White House Down that hit its revenue and bottom line. In its earnings report, the company singled out the "underperformance of White House Down and After Earth" as contributing to lower theatrical revenue.  

But it said that lower film results were partially offset by higher TV production sales, including revenue from Breaking Bad and Wheel of Fortune, and a $106 million gain earlier in the fiscal year realized on the sale of the film unit's music publishing catalog.

Operating income at Sony Pictures for the final quarter of the fiscal year fell by 64 percent compared to the same period last year, to just under $100 million (¥10.2 billion).

Sony Pictures CEO Michael Lynton told investors in Los Angeles in November that the entertainment operations should generate $8.4 billion in the year to March 2015, with operating income of around $630 million. The strategy to achieve that includes a "significant shift from motion pictures to higher margin television," production.

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Overall, Sony Corp recorded a full-year loss of $1.25 billion (¥128.4 billion) on revenue of $75 billion. Sales fell slightly on a dollar basis, but were boosted by the weak yen. The successful launch of the PlayStation 4 and higher sales for its smartphones were some of the few bright spots for Sony during the year.

Operating income at Sony Music jumped 35 percent to $487 million on revenue of $4.89 billion, boosted by strong performances by albums from One Direction, Daft Punk and Beyonce.

The conglomerate predicted red ink of $490 million (¥50 billion) for the year to March 2015. This would be its fifth loss in six years, as it spends another $132 million on restructuring to pull out of the personal computer business and spins off its loss-making TV set manufacturing operations into a separate entity.

Sony shares closed up 1 percent at ¥1,805 ($17.66) in Tokyo before the earnings announcement.

 

Twitter: @GavinJBlair

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