Sony reported a sharp fall in profits in the three months to June, hurt by lower sales of TVs, gaming consoles and computers. Sales for fiscal Q1 improved 1.4 percent from a year earlier to JPY 1.515 trillion, thanks to the takeover of Ericsson's stake in their mobile phone venture. On a pro forma basis for the takeover, sales were down 7 percent from a year ago. Operating profit fell to JPY 6.3 billion from JPY 27.5 billion, hurt by negative currency effects as well as an increase in restructuring charges to JPY 11.3 billion, offset by an insurance benefit of JPY 16.4 billion for the flooding in Thailand. The net loss widened to JPY 24.6 billion from JPY 15.5 billion a year earlier.
The Mobile Products & Communications division, which includes mobile phones and computers, posted sales of JPY 285.6 billion, up from 122.6 billion a year earlier due to the takeover. On a like-for-like basis, sales rose 14 percent, thanks to higher average selling prices for mobile phones on the shift to smartphones and higher unit sales of smartphones such as the Xperia S and acro HD. After unit sales of 7.4 million smartphones in the quarter, Sony raised its full-year outlook to 34.0 million units, versus 22.5 million last year. The division recorded a quarterly operating loss of JPY 28.1 billion, versus a profit of JPY 1.6 billion a year ago, due to lower PC sales and one-time charges for the takeover. Excluding the latter, the loss was JPY 7.2 billion.
Due to the stronger yen and weaker economy, Sony cuts its full-year sales forecast to JPY 6.4 trillion, from an estimate of JPY 7.4 trillion in May. This is still up almost 5 percent from last year. While the company expects to remain profitable, the outlook for operating profit was cut to JPY 130 billion, and the net profit estimate falls to JPY 20 billion. Sony said it expects significant growth in underlying sales and operating at Sony Mobile this year, as well as at its components business, while sales of gaming devices and TVs will remain weak.
