Sony Loses $191 Million in First Quarter of Fiscal 2011
The film unit, which benefited from such home video releases as "The Green Hornet," was a bright spot, but the company cut its overall full-year forecast by 25 percent to 60 billion yen.
TOKYO – Sony Corp. on Thursday reported a quarterly loss of 15.5 billion yen ($191 million), compared to a profit of 25.7 billion yen in the year-ago period as the March earthquake and tsunami, weaker demand for LCD TVS, falling PlayStation 3 sales, the hacking of the PlayStation Network and the strong yen all took their toll.
Sony Pictures was a rare bright spot for the conglomerate as the company cut its profit forecast for the full fiscal year by 25 percent to 60 billion yen.
Film unit revenue for what is the conglomerate's fiscal first quarter was up from 132.1 billion yen to 144.4 billion ($1.7 billion). The 9.3 percent gain over the year-ago period was actually 23 percent in local currency, with the strong yen hurting earnings. The division benefited from strong home entertainment sales of titles such as The Green Hornet, Battle: Los Angeles and Just Go With It, though on the theatrical side there was nothing to match last spring’s Karate Kid.
Film unit operating profit rose 50 percent to 4.3 billion yen ($53 million) driven by higher advertising revenue from a TV network in India and a gain on the sale of Sony's stake in a U.K. TV production company.
Financial services was the only other division to show an improvement over last year.
Sales at Sony Music fell 0.6 percent year-on-year, though in local currency they actually rose 7 percent to 109.6 billion yen ($1.35 billion) helped by strong performances by Adele’s 21, Beyonce’s 4, Foo Fighters’ Wasting Light and the cast album from Glee.
Sony's consumer products and services segment, which now contains the video games and home electronics divisions, saw revenue fall 17.9 percent to 732.3 billion ($9 billion) on weaker TV and PlayStation 3 sales. Operating income from the division plunged from 28.5 billion yen to 1.7 billion.
Sales of the PS3 fell from 2.4 million units last year to 1.8 million, but the portable PlayStation Portable saw sales increase from 1.2 million to 1.8 million. The company’s new portable console, PlayStation Vista, is due to be launched this fall. During a conference call with overseas investors, Sony executives didn't comment on Nintendo's announcement on Thursday that it will cut the price of its 3DS gaming device.
Asked about the 3D electronics business, Sony executives said Thursday that once more content becomes available, the 3D TV device business will improve.
Discussing recent weakness in the performance of key 3D releases by various studios, Rob Wiesenthal, executive vp and CFO of Sony Corp. of America, said that "it's about the story," which "3D can super-charge." Films based on strong story-telling "have done well," movies that have simply "used 3D as a novelty" have not fared so well, he said. Overall, he concluded: "We're in the beginning stages of 3D, but so far, so good."