HONG KONG -- Sony Corp. has cut its profit forecast for the full 2013-14 year after results for the second quarter to end Sept. stayed in the red and the Sony Pictures unit slipped from profit into loss.
Sales revenues at Sony Pictures in the three month period dropped by 13% in US dollar terms (but showed a 9.1% increase when expressed in the weakened Japanese currency), due to a painful combination of lower TV licensing, a weaker home entertainment business and smaller theatrical revenues. In particular the poor B.O. performance of "White House Down" weighed on the results.
For the six month period the Pictures division scored a 14% revenue drop in constant currency terms. It saw net income of JPY3 billion replaced by an operating loss of JPY14 billion ($143 million).
At Sony corporate level, the overall pattern this time is the reverse of the picture for the past several years where motion pictures have performed well and electronics manufacturing lagged.
The corporation altered its April 2013 to March 2014 full-year guidance from a net profit of JPY50 billion ($512 million) to JPY30 billion ($307 million).
Expressed at current exchange rates Sony Corp. showed revenues up by 11% from JPY1.60 trillion to JPY1.78 trillion ($18.1 billion) for the three months. But with the Japanese Yen having weakened by 20.5% over the comparable period, the results are weaker when expressed in US dollar terms.
Net losses in Yen worsened from JPY15.5 billion to JPY19.3 billion. Expressed in adjusted dollar terms the second quarter net loss was an almost unchanged $195 million.
For the six month April to September 2013 period revenues increased in Yen terms by 12% to JPY3.48 trillion, but decreased 6% in constant currency terms. Net losses were JPY15.6 billion, compared with JPY40 billion in the first half of last year.
The group blamed its poor operating profit performance on "a significant decline" at Sony Pictures, partially offset by strong smartphone sales and currency gains. It also received a $49 million insurance payout relating to the 2012 floods in Thailand which damaged factories.
The games division saw revenues up by 5% to JPY156 billion (but down 14% on a constant currency basis) or $1.56 billion. Small operating profits of JPY2.3 billion were replaced by losses of JPY800 million ($8 million) as it made a strategic price cut for the PlayStation Vita.
Sony Cuts Profit Forecast as Pictures Slip Into Loss
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