Sony Posts First Annual Profit in Five Years
UPDATED: Boosting the latest results were a weaker yen, asset sales and such box office hits as "Skyfall" and "The Amazing Spider-Man."
Entertainment and consumer electronics giant Sony Corp., led by CEO Kaz Hirai, on Thursday posted its first full fiscal-year profit in five years, helped by asset sales, the weaker yen and stronger results at its movie unit.
Sony's earnings for the fiscal year ended March 31 reached $458 million (43 billion yen), compared with a year-ago loss of $5.7 billion (457 billion yen), helped by the sale of stock holdings and buildings. Sony's operating result also swung to a profit of $2.45 billion after an operating loss of $820 million in the previous fiscal year. Revenue rose 4.7 percent to $72.3 billion as a weaker yen boosted competitiveness and the value of overseas revenue.
Sony's movie unit reported $509 million in operating profit for the full year, up 40 percent, on an 11.4 percent, or four percent on a constant currency basis, revenue gain to $7.8 billion.
The company cited "significantly higher theatrical revenues from the ... year’s film slate, partially offset by the sale of a participation interest in Spider-Man merchandising rights in the previous fiscal year." Big box office hits that helped the latest fiscal year included Skyfall and The Amazing Spider-Man, whose positive contribution was partially offset by the under-performance of Total Recall.
The segment results also benefited from higher home entertainment revenue from U.S. cable TV programs and better home entertainment revenue.
Sony also posted a music unit operating profit of $396 million for the latest year, up 0.9 percent. Revenue declined 0.2 percent to $4.7 billion.
"This was due to the continued worldwide contraction of the physical music market and the impact of a larger number of successful releases in Japan in the previous fiscal year, offset by the favorable impact of the depreciation of the yen against the U.S. dollar and growth in digital revenue," the company said.
Best-selling titles included One Direction’s "Take Me Home" and "Up All Night," P!nk’s "The Truth about Love," and Justin Timberlake’s "The 20/20 Experience."
Meanwhile, Sony's gaming unit saw its operating profit fall 94 percent to $18 million as revenue dropped 12 percent to $7.5 billion. The company cited lower PlayStation 3 and PlayStation Vita hardware sales, as well as lower PSP hardware and software sales. A February price cut of the PS Vita in Japan also affected the unit's bottom line, Sony said.
For the latest quarter, Sony's profit amounted to $948.5 million, compared to a year-ago loss. Quarterly revenue rose 8.3 percent.
For the current fiscal year that ends March 2014, Sony said it expects a profit of $506 million (50 billion yen) and an operating profit of $2.3 billion (230 billion yen).
On an earnings conference call, Sony executives said that games revenue should see a "significant" increase in the new fiscal year amid the planned launch of the new PlayStation console. Including higher research/development and marketing expenses, the segment will keep profitability about flat, they said.
In the movies unit, financials should rise significantly in yen amid a weakening yen, while results should be flat in dollars. With TV revenue up and lower theatrical and home entertainment results amid tough comparisons, operating profit will be "essentially flat" in the current fiscal year, the company said.
Music revenue and operating profit should be up this year due to the yen depreciation and higher digital revenue, Sony said.