Sony Film Unit's Full-Year Profit Rises to $488 Million
Sony Corp. reported its annual profit, including for its film and video games businesses.
Sony Corp.'s film unit recorded a full fiscal-year operating profit of $488 million (￥54.6 billion), while Sony Corp. overall posted a record $8.3 billion (￥916 billion) annual profit, the company said Friday.
The film unit profit was up from $376 million in the previous year. Revenue at Sony Pictures Entertainment in the fiscal year through the end of March was down 2 percent to $8.8 billion (￥987 billion).
Operating income at the film unit was driven by TV licensing and home entertainment sales of higher-margin titles, including Jumanji: Welcome to the Jungle and Peter Rabbit, and lower theatrical marketing expenses. The company also cited the 3.8 billion yen ($34 million) impact of a new accounting standard regarding revenue from contracts with customers.
These factors were partially offset by lower worldwide theatrical revenue as titles like Venom, Hotel Transylvania 3: Summer Vacation and Spider-Man: Into the Spider-Verse couldn't match the performance of the prior year, whose slate included Jumanji: Welcome to the Jungle and Spider-Man: Homecoming. Sony also reported a decrease in sales for TV productions "due to lower licensing revenues for various U.S. television series and catalog product" and lower advertising revenue at its TV channels.
Sony also cited the impact of 12.8 billion yen ($115 million) in programming write-offs and severance expenses related to the company's review of its worldwide TV channel portfolio, which has led to some network closures.
The return on investment capital (ROIC) figures for the pictures division were up from 3.1 percent the previous year to 4.5 percent, but that still puts them well below other divisions. The pictures division invested more than $7.4 billion last year, more than the $6 billion put into semiconductors, which produced ROIC of 14.6 percent.
Sony is forecasting increased revenue of $9.7 billion (￥1.08 trillion) and profits of $581 million (￥65 billion) at the pictures division for the current fiscal year to March 2020.
Profit also jumped at Sony's game division, to $2.78 billion (￥311 billion), on revenue of $20.69 billion, boosted by higher software sales and subscriptions to the PlayStation Plus+ network despite a drop in hardware sales for the PlayStation 4 console from 19 million units the previous year to 17.8 million.
Music also saw significantly better numbers, with profits up to $2.08 billion on higher streaming revenues and the consolidation of the EMI Music Publishing business, which the company took full control of late in 2018, giving it more than 4.5 million songs in its catalog. Top-selling releases included albums from Travis Scott, Camila Cabello, Luke Combs and George Ezra.
Operating income also grew at Sony's home entertainment and sound division, while mobile phones continued to be a thorn in Sony's side with another drop in sales and profits. Semiconductors and financial services also posted drops in operating income despite higher revenue.
Sony's stock closed down 0.8 percent at ￥5,212 ($46.65) in Tokyo just before the earning announcement and is largely flat over the last 12 months.
Sony is forecasting a fall in overall profits of 45 percent to ￥500 billion, currently $4.48 billion, for the year to March 2020.