Sony reported a return to sales growth in its fiscal first quarter to June, as growth in the gaming market helped offset weaker sales in the consumer electronics and media sectors. Revenues rose 2 percent year-on-year to JPY 1.968 trillion and were up 4 percent on a constant currency basis. Operating profit dipped 1 percent lower to JPY 228 billion, while net profit rose 53 percent to JPY 233 billion, helped by lower taxes and a gain on the sale of shares in Pledis Entertainment.
At the Games & Network Services division, revenues were up 32.5 percent year-on-year to JPY 606 billion, and operating profit improved to JPY 124 billion from JPY 74 billion a year earlier. While hardware sales were lower, the company saw a jump in Playstation software sales, driven by more people stuck at home during the coronavirus lockdown. Over the full year, Sony expects the software growth to continue, but the higher profits will be offset by extra marketing costs to launch the PS5.
At Electronics Products & Solutions, the new division grouping its consumer electronics, TV and smartphone businesses, Sony suffered a 31.4 percent fall in quarterly sales to JPY 332 billion. The company said sales of cameras, TV and AV equipment were lower due to the Covid-19 outbreak. The operating result moved to a loss of JPY 9 billion from a profit of JPY 25 billion a year ago.
The smartphone business contributed JPY 94 billion in revenues to EP&S, down 6.4 percent year-on-year. Its operating profit improved to JPY 11 billion from JPY 1 billion a year ago thanks to restructuring efforts.
Sony said the drop in consumer electronics product sales is expected to continue this fiscal year, also impacting its components business, while its Music and Pictures businesses also suffer from the effects of the coronavirus pandemic. As a result, group sales are forecast flat over the full year at JPY 8.3 trillion, while operating profit falls 27 percent to JPY 620 billion. The net profit is forecast down 12 percent to JPY 510 billion. It aims to pay an interim dividend of JPY 25 per share but is undecided still on the final pay-out.
