Sony Film Unit Full-Year Profit Up Due to Weak Yen

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Sony Pictures Entertainment

The hack suffered by Sony Pictures Entertainment at the end of last year cost the company a total of $41 million, up from a previous estimate of $35 million.

Sony Corp.'s film unit recorded a full-year operating profit of $488 million (58.5 billion) on Thursday, up 13.4 percent on the previous year in yen terms - driven by the weakening of the Japanese currency against the U.S. dollar.

The result came on a 5.9 percent revenue gain for Sony Pictures Entertainment (SPE) in yen, or a 4 percent drop on a constant dollar basis, to $7.3 billion (879 billion), with the weak yen again playing a key role.

Michael Lynton, CEO of SPE, said in November 2013 that the entertainment operations would generate $8.4 billion in the fiscal year that ended in March, with operating income of around $630 million.

Hits such as The Amazing Spider-Man 2 and 22 Jump Street helped boost Sony Pictures earnings following major flops such as After Earth and White House Down that hit its revenue and bottom line in the previous financial year.

The hack on SPE at the end of last year, widely believed to have been ordered by North Korea in revenge for the Seth Rogan comedy The Interview, has cost the company $41 million so far in damages and investigation expenses, up from a previous estimate of $35 million. 

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"The television program production business continued its strong performance," said Kenichiro Yoshida, CFO and vice president, before predicting that the pictures division would likely register a loss in the first half of the current year due to the scheduling of the film slate.

For the final quarter of the year, to March 31, the Pictures segment logged operating income of $383 million (45.5 billion) on sales of $2.48 billion (295 billion), which was up 9.7 percent in yen terms, but down 6 percent on a dollar basis.

Overall, Sony Corp recorded a full-year loss of $1.05 billion (126 billion) on revenue of $68.5 billion, compared to a loss of $1.25 billion in the previous year. Sales fell more sharply on a dollar basis, but the effect was reduced by the weak yen.

Operating income at Sony Music jumped 17 percent to $491 million on revenue of $4.5 billion, but flat in dollar terms. Strong sales of albums from One Direction and AC/DC helped maintain revenue.

The games division logged operating income of $401 million (¥48 billion) boosted by strong sales of the PlayStation 4 console, which has comfortably outperformed its rivals from Microsoft and Nintendo.

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Sony's troubled television manufacturing business recorded an operating profit of $70 million (8.3 billion) on sales of $7.02 billion (835 billion), the first full year of black ink in the division since 2003, noted CFO Yoshida, speaking at Sony's Tokyo headquarters.

Sony forecast operating profit for the pictures division in the fiscal year to March 2016 of $8.58 billion on sales of 1.02 trillion yen, up 16 percent on the year that ended last month.

The conglomerate predicted profits of $568 million (68 billion) for the year to March 2016, which would be its best results since 2008.

The company will resume paying dividends to stockholders, starting with ¥10 (8 cents) per share this year, after it canceled payouts in 2014 for the first time since Sony went public.  

Sony shares closed down 1.4 percent at 3,640 ($30.68) on the Tokyo market, compared to a 2.5 percent drop for the Nikkei 225 index, before the earnings announcement.

Updated April 30, 05.40 a.m. A previous version of the article incorrectly stated that the previous estimate for costs related to the hack was $15 million, which was the cost booked in the third quarter. The Hollywood Reporter regrets the error. 

Twitter: @GavinJBlair

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