Sony profit down sharply in Q1, trims FY sales outlook again

News Wireless Global 29 JUL 2016
Sony profit down sharply in Q1, trims FY sales outlook again
Sony reported lower results for its fiscal first quarter to June, hurt by a sharp slowdown in smartphone sales and disruption to its components business from an earthquake in Japan. Sales fell 10.8 percent from a year earlier to JPY 1.613 trillion and were down 3 percent after excluding currency effects. Operating profit fell to JPY 56.2 billion from JPY 96.9 billion a year ago, and net profit plunged to JPY 21.2 billion from JPY 82.4 billion. Operating profit included JPY 20.3 billion in impairment charges for certain camera modules at the Semiconductors segment, as well as net charges of JPY 13.6 billion for expenses incurred after the Kumamoto earthquake

At the Mobile division, sales fell 33.7 percent to JPY 185.9 billion, which Sony blamed on lower smartphone sales in the mid-range segment as well as a withdrawal from some unprofitable countries. Unit sales fell to 3.1 million smartphones from 7.2 million a year ago, and Sony cut its full-year target again, to 19 million. The division's operating result improved to a profit of JPY 0.4 billion in Q2 from a loss of JPY 22.9 billion a year ago, thanks to restructuring efforts, a better product mix and currency effects. 

Sony smartphone shipments (Q1 FY14 - Q1 FY16)

The weak performance in phones was offset by continued strong results from the Games division. Sales rose 14.5 percent to JPY 330.4 billion, and operating profit jumped to JPY 44.0 billion from JPY 19.5 billion. Sony sold 3.5 million Playstation 4 consoles in the quarter, up from 3.0 million a year ago. Sony's Imaging and Semiconductors divisions did less well in the quarter due to the impact of the earthquake, while the consumer electronics division nearly doubled operating profit thanks to restructuring and more high-end products sold. 

For the full year, Sony lowered its sales forecast to JPY 7.4 trillion from an already reduced estimate in May of JPY 7.8 trillion, due to the impact of foreign exchange rates as well as expected lower sales in the Mobile, Pictures and Gaming segments, partially offset by an increase in sales in the Imaging segment. It left the operating profit forecast unchanged at JPY 300 billion, amid expected increases in operating profit in the imaging and consumer electronics segments. 

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