Published in News

Sony reports highest first quarter profit

by on01 August 2017


Could be a record breaker 

Sony has reported its highest ever first-quarter operating profit, and it looks like the electronics giant might get its highest annual profit in two decades.

The results are on the back of robust sales of image sensors,  smartphone camera chips, a healthy music business and brisk sales of PlayStation 4 consoles and games.There is some speculation thinks that expected box-office success of its "Spider-Man: Homecoming" film will create a rise in earnings for Sony's pictures business, which is working through a restructuring plan.

In a vote of confidence for Sony's turnaround under Chief Executive Officer Kazuo Hirai, the firm's shares have risen by around 40 percent this year to nine-year highs.

Profit increased 2.8 times to $1.43 billion in April-June, exceeding the previous first-quarter record  set in 2007.

Games, the biggest division by revenue, saw operating profit decline 60 percent to 17.7 billion yen, while sales rose 5.4 percent to 348.1 billion yen. The company blamed the sharp profit drop on inflated profits a year ago, when adventure game Uncharted 4 was released. The flagship title went on to become the second-best selling title of the year.

Despite the profit drop this quarter, Sony upgraded its games profit guidance for the full year by 5.9 percent and sales by 4.8 percent. It sold 3.3 million PlayStation 4 units during the quarter, slightly down from 3.5 million last year. The company kept its forecast to sell 18 million units this year unchanged.

“Games business was revised up because PS4 sales are still strong and Xbox One X, with its high price, is seen less of a threat,” Dai said, referring to Microsoft Corp.’s recently unveiled new console.

The PlayStation 4 is heading into a late-stage life cycle, usually the most profitable period for consoles as new titles are sold to an increasing installed base of owners. But this cycle is even more lucrative due to Sony’s online gaming service PlayStation Network, which charges users subscription fees to play with others and lets them download games, generating higher margins than selling physical copies.

Operating profit in chips was 55.4 billion yen, recovering from a loss a year earlier, as the company recovered from last year’s earthquake and demand from phone makers increased due to the rising popularity of multiple-sensor models. Sony controls about half of the market for image sensors, the chips that convert light particles into digital photos and videos. Chip division revenue rose 41 percent to 204.3 billion yen.

The profit surge comes mainly as Sony's image sensor business returned to stability having recovered from earthquake damage sustained a year ago, the company said.

Sony's semiconductor division, which includes image sensors, posted an operating profit  reversing the year-earlier loss  as operations at a key plant fully resumed to meet brisk demand for image sensors for smartphones.

The consumer electronics business was also profitable as it focused on high-end television sets and smartphones without seeking to increase in scale.

Together, strong performance across Sony's divisions is pushing profit to golden-era levels. Nevertheless, analysts said the firm is yet to find long-term drivers of growth.

Sony is using its newly recovered financial strength to venture into acquisitions. On Monday, it said it had bought most of the distributor of the English-language versions of "Dragon Ball Z" and "One Piece" animations.

 

 

Last modified on 01 August 2017
Rate this item
(0 votes)

Read more about: