Sony Pictures Quarterly Profit Slips to $233M

Sony Pictures saw its fiscal first-quarter profit slip to $232.7 million (25.4 billion yen), a decline of 6 percent from the same period a year ago when its profit amounted to $247 million (27 billion yen).

Sony Corp. reported April-to-June earnings on Wednesday at its headquarters in Tokyo. The Japanese conglomerate attributed the 1.7 percent decline in earnings at the pictures division — which spans movies, TV networks and TV production — to increased production costs that more than offset higher revenue. Quarterly revenue at Sony Pictures climbed $245 million in the quarter to $1.87 billion, a 15 percent increase over the year-ago period. Revenue for its motion pictures rose slightly, but the studio’s television production business and home entertainment segment recorded decreases. Networks revenue rose “due to higher advertising and subscription revenues,” the company said.

Related Stories

TV

After 'House of the Dragon,' Will Warner Bros.' World of Westeros Fly or Fail?

TV

Reese Witherspoon's Hello Sunshine Expands Into U.K., Hires Sarah Lazenby to Lead New Unscripted Division

Looking ahead, Sony Pictures revised its profit forecast for the full fiscal year 2021 upwards. The company now anticipates a profit of $825 million (90 billion yen) from the pictures division, up from the $760.8 million (83 billion yen) forecast in April. Total profits for the studio in fiscal year 2020 hit 79.9 billion yen (or $762 million at last year’s exchange rates). The forecast adjustment reflects higher-than-expected licensing sales of its movies and TV series, Sony said.

The studio made a point in its earnings call to emphasize that the North American box office has recovered to a level of about 45 percent-50 percent of its pre-pandemic potential, but it remains uncertain when theatrical sales might reach a level previously considered “normal.” Sony Pictures’ theatrical titles earned $169 million in total global box office revenue in the latest quarter, with releases including The Unholy, Here Today and Peter Rabbit 2: The Runaway.

The company said it will continue pursuing a “flexible strategy” for its films, awaiting the postponed theatrical release of some major tentpoles, while selling others to streaming platforms to maximize revenue in the near term. The studio’s much anticipated superhero sequel Venom: Let There Be Carnage, for example, was moved from its original June 25 release date to late September, while animated musical movie Vivo was sold to Netflix for an Aug. 6 streaming release, as was Cinderella for a Sept. 3 outing on Amazon Prime Video.

While many of its Hollywood studio peers have sought to emulate Netflix by launching their own costly direct-to-consumer streaming services, Sony has opted for an alternate route of remaining a producer and licensor in a seller’s market. To that end, Sony inked a pair of lucrative, multi-year licensing deals for its film output with both Netflix and Disney in April.

At the group level, Sony Corp. reported a 26.3 percent rise in first-quarter earnings, benefiting from a somewhat smaller-than-expected slip in coronavirus pandemic-fueled demand for its PlayStation 5 gaming products. Sony’s operating profit for the quarter rose to $2.57 billion (280.1 billion yen) from 221.7 billion yen last year.

The conglomerate raised its overall profit forecast for the full year through March 2022 to $8.98 billion (980 billion yen) from $8.53 billion (930 billion yen). 

Sony’s entertainment sales were particularly strong in the music group, where profit climbed 56 percent from $326 million (35.6 billion yen) in the first quarter of 2020 to $508 million (55.4 billion yen) during the same period this year. The company noted a surge in streaming revenue as the key driver of profits in the group.