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Sony Pictures’ operating income for its fiscal third quarter ending December fell to $179 million, down 86 percent from $1.31 billion in the same period the previous year, hit by the lack of major theatrical hits and lower revenue from television licensing.
Lyle, Lyle, Crocodile was the Sony unit’s biggest earner with $96 million, followed by Roald Dahl’s Matilda The Musical and Whitney Houston: I Wanna Dance With Somebody, both logging $25 million.
The same quarter in 2021 had seen the release of Spider-Man: No Way Home and Venom: Let There Be Carnage, along with the sale of GSN Games and the licensing deal for Seinfeld, delivering the film unit its best-ever results.
Quarterly revenue at the pictures division fell 42 percent to $2.35 billion from $4.06 billion, despite contributions from the acquisitions of Bad Wolf and Industrial Media, the company said in Tokyo on Thursday.
Sony Pictures’ profit forecast for the full fiscal year ending in March was kept unchanged at 115 billion yen ($890 million at current exchange rates).
At the group level, Sony’s operating income fell by 8 percent to $3.33 billion (428.7 billion yen), hit by the weaker performance at Sony Pictures, offset by strong results in the gaming and imaging divisions. Overall sales grew by 13 percent to $26.52 billion (3.413 trillion yen).
The yen’s weakness against the dollar boosted profits in most divisions, though it increased costs in some areas of business. Sony used an exchange rate of 141.7 yen to the dollar for the last quarter, compared to 113.7 for the period in the previous year. The dollar is currently trading in the 128 yen range.
Profit in the gaming division rose 25 percent to $180 million on increased sales of the PlayStation 5 console (shifting 7.1 million units), strong in-house game titles and the exchange rate. Revenue was up 53 percent, with the weak yen accounting for nearly a third of that.
Foreign exchange rates also boosted the music division, helping it to a 14 percent profit increase to $490 million on revenue of $2.83 billion. Harry Styles, with Harry’s House and Fine Line, and Beyoncé with Renaissance, were its biggest-selling artists.
Sony Group also announced Thursday that CFO Hiroki Totoki, 58, would succeed Kenichiro Yoshida, 63, as group president, though Yoshida will remain CEO and chairman. The pair have worked closely together at Sony Bank and Sony Network Communications, and the new arrangement, under which Totoki will also be COO, is at the request of Yoshida, according to Sony.
Totoki will also retain the CFO role he was appointed to in 2018 when Yoshida took over the helm of Sony from Kaz Hirai.
“Together with Mr. Yoshida, the Sony Group’s management team, and our employees around the world, I would like to create a positive spiral that begins with Sony being chosen by customers, which then energizes our employees, enables us to attract more new talent, increases our corporate value, and ultimately enables us to give back to society,” said Totoki of his appointment.
The group has continued its shift away from being centered on consumer electronics with the founding of the Sony Honda Mobility joint venture to develop electric vehicles, as well as ongoing investments in the gaming and music sectors.
Sony shares were flat at 11,470 yen ($89.20) in Tokyo shortly before the earnings announcement.
More to come…
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