Sony's profit falls on yen, lagging cellphones, Japan quake

AP News
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Posted: Jul 29, 2016 4:56 AM
Sony's profit falls on yen, lagging cellphones, Japan quake

TOKYO (AP) — Sony Corp.'s fiscal first-quarter profit dipped 74 percent to 21.2 billion yen ($205 million), as earnings were hammered by a strong yen and lagging smartphone sales, and a quake in southwestern Japan that disrupted its camera parts and semiconductor production.

The Japanese electronics and entertainment giant reported Friday that April-June sales slipped nearly 11 percent year-on-year to 1.6 trillion yen ($15.7 billion).

Quarterly profit last year totaled 82.4 billion yen.

Tokyo-based Sony, the maker of Bravia TVs and Walkman portable players, said game software sales for the PlayStation 4 video game console performed well.

Results were hurt by the earthquake in April that devastated parts of Kumamoto, on the southern island of Kyushu that slowed development and manufacturing of camera parts, resulting in repair costs, damages and other expenses, it said.

Sony has been pursuing a turnaround in recent years, and selling some assets, such as its Vaio personal computer business.

This week, it agreed to sell its battery business to Japanese electronic components maker Murata Manufacturing Co. It hopes to complete a deal by October and do the transfer by March next year.

Sony's TV division has lost money for years, and its smartphone offerings have suffered amid intense competition from Apple Inc.'s iPhone and Samsung Electronics Co.'s Galaxy line.

Its movie division benefited from the popularity of "The Angry Birds Movie," Sony said. Among its music best-sellers was Beyonce's "Lemonade," it said.

Sony kept its profit forecast for the full fiscal year unchanged at 80 billion yen ($774 million), a fraction of the 148 billion yen earned in the fiscal year that ended in March.

It lowered its annual sales forecast to 7.4 trillion yen ($71.6 billion) from an earlier 7.8 trillion yen ($75.5 billion).

An unfavorable exchange rate was another minus for Sony. Sony said the dollar dipped from 121 yen in the same quarter the previous year to about 108 yen for the period through June. A strong yen hurts earnings of Japanese exporters when translated into yen.

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