TOKYO – While operating income at Sony jumped 94.6 percent to $860 million (?90.3 billion) for the October to November quarter, the company reversed its previous forecast of a $300 million profit for the year to March, to a loss of $1.1 billion. The quarterly results were boosted by the strong launch of the PlayStation 4, a 32.5 percent jump in profits to $207 million at the music division, stronger smartphone sales and a weaker yen.
Ongoing losses at the TV manufacturing division, which Sony is to spin-off into a separate subsidiary, and the PC business, which will be sold, contributed to the company cutting its full-year forecast as it struggles to generate profits from its once world-beating consumer electronics products. Overall sales were up 23.9 percent to $22.979 billion (?2.41 trillion yen), helped by the yen falling nearly 20 percent against the dollar compared with the same quarter in 2012. A weaker Japanese currency boosts the value of overseas sales for Sony when it brings earnings home.
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Sony Pictures saw a 4.2 percent fall in operating income to $231 million (?24.3 billion) due to lower theatrical and home entertainment revenue. Its two biggest hits during the quarter were Captain Phillips and Cloudy with a Chance of Meatballs 2. Television production revenues were lifted primarily by revenue from home entertainment and VOD sales for Breaking Bad, however costs increased due to the number of new TV shows produced for U.S. networks. While overall sales in yen actually grew 7.1 percent, they fell 13 percent in dollar terms.
Results for the same quarter last year were boosted by the strong theatrical performance of Skyfall and home entertainment revenue from The Amazing Spider-Man and Men in Black 3, helping Sony Pictures log a $270 million profit.
The Games division registered profits of $172 million (?18 billion), up 292 percent, on sales of $4.2 billion, thanks to the launch of the PlayStation 4 (PS4), which has beaten sales targets since its November launch. The PS4 will be released in Japan on Feb. 22, which will be the first time Sony releases a new console in its home market after the rest of the world, and should provide further momentum to its already strong performance.
Sales at the music division were up 14.4 percent to $1.378 billion (?144.7 billion), but fell slightly on a local currency basis, despite strong album sales from One Direction, Midnight Memories, Beyonce, Miley Cyrus, Celine Dion and Kelly Clarkson. Digital revenue continued to grow, according to Sony, while sales in Japan dropped due to a large number of successful releases in the same quarter of the previous year.
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Sony is to spin-off its television business into a wholly-owned subsidiary, to “enhance autonomy of the business.” Home entertainment and sounds, which includes the long-struggling television business, registered an operating profit of $61 million on higher unit sales and lower costs. However, the television segment was still in the red despite stronger sales and cost reductions.
The mobile products division saw sales up 44.8 percent, on growth in smartphone sales, but still registered an overall loss of $120 million (?12.6 billion), partly due to falling PC sales. Sony confirmed that it will dispose of its computer division to private equity fund Japan Industrial Partners.
Sony shares closed up 1.44 percent at ?1,623 ($15.98) in Tokyo before the announcement.
Twitter: @GavinJBlair
