Sony Posts Widened Quarterly Loss, Cuts Full-Year Outlook
Sony Quarterly Earnings Improve, Driven by Strong Showing at Film Unit
Sony Corp. on Thursday reported a widened loss for its fiscal first quarter despite a revenue gain as the strong yen, particularly against the euro, continued to hurt earnings.
The entertainment and consumer electronics giant posted a loss of $312 million. In yen, its loss widened from 15.5 billionto 24.6 billion. Operating profit fell 70 percent, and adjusted operating profit dropped 40 percent to $258 million.
Revenue increased 1.4 percent to $19.18 billion though, or 5 percent on constant currency terms.
Sony cut its full-year profit forecast amid weaker demand and a continued strong yen, which reduces its overseas earnings.
The conglomerate said its full-year profit will probably reach around 20 billion yen ($255 million). That is down from a May forecast of 30 billion yen. The company also revised downward its full-year operating income estimate from 180 billion yen to 130 billion ($1.66 billion).
Sony's film unit recorded mixed results for the latest quarter. Revenue rose 6.2 percent, or 7 percent on a constant currency basis, to $1.94 billion. But the movie division swung to an operating loss of $62 million after posting a slight profit in the year-ago period. One key factor was higher marketing spending for its latest films, which include The Amazing Spider-Man, which hit theaters at the end of June. The year-ago period had also seen a one-time benefit in the film unit from the sale of a stake in a U.K. TV production firm.
Film revenue benefited from a couple of factors. "The current quarter benefited from higher theatrical revenues from the current fiscal year’s film slate, including the worldwide theatrical performance of Men in Black 3 and higher U.S. made-for-cable and network programming revenues," the company said. "Partially offsetting these increases were lower advertising revenues from Sony’s television networks in India."
Meanwhile, Sony reported a 9.8 percent declined in revenue and a 39.8 percent drop in operating profit for its music operations.
"The decrease in sales was primarily due to the continued worldwide contraction of the physical music market and a larger number of key releases in Japan during the same quarter of the previous fiscal year," the company said. "Best-selling titles during the quarter included One Direction’s "Up All Night and Up All Night - The Live Tour DVD," Carrie Underwood’s "Blown Away" and Usher’s "Looking 4 Myself."
Georg Szalai in London contributed to this report.