Sony Quarterly Operating Results Improve Amid Strong Showing at Film Unit
TOKYO -- Sony Corp. returned to the black in its fiscal third quarter on an operating basis.
The entertainment and electronics conglomerate posted an operating profit of $495 million (46.4 billion yen), compared to a loss double that size in the same period a year ago. But including non-operating items, the company reported a net loss, its eighth quarterly loss in a row despite analysts' expectations for a profit.
Sony Pictures and financial services continued to be the conglomerate's best-performing divisions.
Sony restated its forecast for a full fiscal year profit. It would be the conglomerate's first profitable year in five. The company also reiterated its full-year revenue projection.
Revenue at Sony Pictures climbed just over 30 percent to $2.23 billion (208.9 billion yen), while profit at the division jumped to $270 million on the back of a strong theatrical performance by Skyfall and Hotel Transylvania, as well as home entertainment revenue from The Amazing Spider-Man and Men in Black 3.
Sony Pictures was the highest-grossing studio globally in 2012, with Skyfall its biggest ever earner, ensuring a record box office year for the company. Higher advertising revenue at Sony's television networks in India were largely canceled out by lower numbers from its North American network.
Sony said it expected higher sales and operating profit at the film unit for the full fiscal year, compared to the company's internal figures for its November forecast, largely due to currency fluctuations. The company doesn't publish forecast revenue figures for individual divisions.
Sony said it is currently focusing on franchise films, such as The Smurfs sequel, due for release this summer, as well the Spider-Man series.
The weakening of the Japanese yen over the last few months against the euro, and to a lesser extent the dollar, is beginning to positively impact Sony's operations by making its products cheaper abroad and increasing the value of earnings it repatriates.
“If the current exchange rates continue, this will have a major effect on profitability for the next financial year,” said CFO Masaru Kato.
Overall, revenue was up 6.9 percent to $22.4 billion (1.95 trillion yen), boosted by sales of businesses and assets, including the conglomerate's New York headquarters building.
Sales at the music division were up 2.4 percent to $1.45 billion (126 billion yen), helped by strong performances for One Direction's Take Me Home, Pink's The Truth about Love and Celine Dion's Sans Attendre, as well as the weaker yen.
Sales at the games division were down 15 percent to just over $3 billion, with operating income falling 86.4 percent, on weaker results for the PlayStation 3 and the portable PSP and PS Vita, along with accompanying software for the consoles.
The PlayStation 4, due to be announced on Feb 20 in New York, is expected to be released towards the end of 2013.
LCD television operations continue to lose money, but Sony is maintaining its forecast of returning them to the black in the next fiscal year, ending March 2014. The company said it is continuing to concentrate on selling high-end sets rather than chasing market share in the highly competitive sector.