Sony posts quarterly loss on weak mobile sales

Sony reported a net loss of JPY 136 billion for its fiscal second quarter to September, hurt by an impairment charge to write down the value of its mobile business. Revenues were still up 7.2 percent year-on-year to JPY 1.902 trillion, helped by strong Playstation sales. The operating result moved to a loss of JPY 85.6 billion from a profit of JPY 13.9 billion a year ago, due to the charge of JPY 176 billion for the mobile business. Sony also took JPY 9.9 billion in restructuring charges in the quarter, of which 7.7 billion for exiting the PC business. 

At the mobile division, quarterly sales were up 1.2 percent to JPY 308.4 billion, but fell 4 percent at constant currency rates. The operating loss amounted to JPY 172 billion, versus a profit of JPY 8.8 billion a year ago. Sony maintained its group outlook for 2014, cut in September when it warned about the mobile charge and a rethink at the phone business. It now forecasts the mobile division will report annual sales of JPY 1.35 trillion and a bigger operating loss of JPY 204 billion. 

The mobile outlook was downgraded compared to the last quarterly report due to weaker smartphone sales, especially in China, as well as negative currency effects from the US dollar and restructuring costs. Smartphone unit sales are estimated at 41.0 million in 2014, down from a forecast in July of 43.0 million and 39.1 million sold in 2013. In Q2, Sony shipped 9.9 million smartphones, down from 10.0 million a year ago.  

Elsewhere Sony raised the outlook for its gaming and camera divisions, thanks to stronger-than-expected sales of the Playstation and digital cameras. This also benefited the sale of image sensors at the Devices division. The outlook for LCD TV sales was lowered, with the impact on profit offset by cost reductions.