Sony Corp.'s film unit recorded a full fiscal-year operating loss of $720 million (￥80.5 billion) as the box-office underperformance of key titles and an impairment charge took their toll, the company said Friday.
Revenue at Sony Pictures Entertainment in the fiscal year through the end of March was up 5 percent to $8.06 billion on a dollar basis, but down 3.7 percent in yen terms due to the recent strength of the Japanese currency.
However, a previously announced $962 million (112.1 billion yen) impairment charge for its pictures division due to a reduced profitability outlook for the conglomerate's movies and home entertainment business hit operating income. Without the impairment charge the division would have recorded approximately $240 million in profit, compared with $340 million in the previous year.
The bottom line was also affected by such flops as The Magnificent Seven and Ghostbusters, though Sony scored relative successes with Passengers and Sausage Party. The previous year's figures were boosted by Spectre, which brought in more than $880 million at the global box office.
Television production and VOD continued to be bright spots at the pictures division, with higher TV advertising and subscription revenue in India, South America and the U.S. boosting revenue.
Sony is forecasting a profit of ￥39 billion ($350 million at current rates) for its film division in the current fiscal year, ending in March 2018.
Overall, Sony Corp., led by CEO Kaz Hirai, recorded a full-year profit of $655 million (￥73.3 billion), half of the figure reached for the previous year despite an upwards revision last week. However, this marks the only two consecutive years of profitability since Hirai took over leadership of the entertainment and electronics group in 2012.
Sony's full-year total revenue came in at $68 billion (¥7.6 trillion), down 6.1 percent from the previous year, while operating income fell 2 percent to $2.58 billion.
The music division continued to perform well, with revenue up 4.6 percent (11 percent on a constant currency basis) on stronger revenue from streaming services and a mobile gaming app in Japan that falls under the unit. Music operating profit fell 12.4 percent to $677 million though due to the absence of a one-off gain of $150 million from The Orchard, a wholly-owned music subsidiary, in the previous year. Big-selling titles included Beyonce's Lemonade, hit tracks from The Chainsmokers and Sia's This Is Acting.
The ongoing success of the PlayStation 4 (PS4) console boosted profits at the games division by 52.9 percent to $1.21 billion (￥135.6 billion) on revenue of $14.73 billion, up 6.3 percent. Higher software sales and reductions in manufacturing costs for the PS4 were partially offset by a price cut for the console.
Sony is forecasting a 250 percent jump in overall profit to ￥255 billion, currently $2.3 billion, for the current fiscal year.
Sony stock closed down slightly in Tokyo before the earnings report, in line with the Nikkei 225 index.
More to come …