Sony stays in profit, revenue grows from strong smartphone sales
Sony reported a modest profit in its first fiscal quarter ended June 30, continuing a turnaround that started in the last fiscal year.
The company has also raised its revenue forecast for its current fiscal year on account of the depreciating Yen.
If the return to profitability in the last fiscal year mainly came from the sale of assets including its U.S. headquarters, a large Tokyo office complex and share holdings, the turnaround in the quarter came from improved sales of smartphones and the favorable impact of foreign exchange rates.
The company reported that its net profit was ¥3.5 billion ($35 million) in the quarter, compared to losses of ¥24.6 billion in the same quarter last year. Revenue was up 13 percent to ¥1.7 trillion.
Its mobile products and communications unit reported revenue of ¥389 billion, an year-on-year increase of 36 percent, mainly on account of an increase in both unit sales of smartphones and their average selling price. Game sales were flat at around ¥118 billion due to a decrease in sales of the PlayStation 3, PlayStation Portable and PlayStation 2 devices. The TV and audio business also saw revenue grow by 9.3 percent to ¥275 billion in the quarter.
The Japanese electronics and entertainment giant said in May that it had posted a net profit of ¥43 billion, its first in many years, on revenue of ¥6.8 trillion in the fiscal year ended March 31. It had posted a loss of ¥456.7 billion in the previous year.
The company also forecast net profit would go up 16 percent to ¥50 billion on sales of ¥7.5 trillion in the current fiscal year ending March 31, 2014, in part as a result of sales of its new gaming console, the PlayStation 4, which is scheduled to ship later this year.
The company revised on Thursday its revenue outlook to ¥7.9 trillion, but did not change its profit estimate as it is worried about unfavorable market conditions for electronic products and the falling value of local currencies against the U.S. dollar in emerging markets. It also lowered its estimates for unit sales of PCs.
After its launch of the Xperia Z, the company is following up with new phone models including a large-screen “phablet” device, the Xperia Z Ultra with a 6.4-inch full HD touch-screen display, and new models for China of its Xperia C and SP devices.
Sony is said to be under pressure from investor Daniel Loeb, CEO of hedge fund Third Point, to sell part of its entertainment business, an issue the company did not address when reporting its earnings.