Sony records 84 pct quarterly profit drop on movie loss

AP News
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Posted: Feb 02, 2017 3:15 AM
Sony records 84 pct quarterly profit drop on movie loss

TOKYO (AP) — Japanese electronics and entertainment company Sony Corp. reported Thursday an 84 percent profit drop in October-December, as losses in its movie division offset healthy results in its video game business.

Tokyo-based Sony, which makes the PlayStation 4 game machine and Bravia TVs, reported a fiscal third quarter profit of 19.6 billion yen ($174 million), down from 120.1 billion yen the previous year.

Quarterly sales slipped 7 percent to 2.4 trillion yen ($21.3 billion), mainly because of unfavorable foreign exchange rates, the company said Thursday.

Sony also lowered its full year fiscal profit forecast because of a $962 million write-down in its film division, stemming from its acquisition of Columbia Pictures in 1989.

Sony announced what's called "goodwill impairment," lowering the profitability projection from its movie division, earlier this week.

The company now expects a 26 billion yen ($231 million) profit for the fiscal year ending March 2017. It had earlier projected a 60 billion yen ($532 million) profit. It posted a 147.8 billion yen profit the previous fiscal year.

Sony said its movie business was expected to improve, stressing the decrease in quarterly profit was partly because of the huge success of "Spectre," a James Bond film, and "Hotel Transylvania," an animation about Dracula, the same period last year.

Sony Pictures works released during the third quarter included "Passengers" and "Billy Lynn's Long Halftime Walk," directed by Ang Lee. Neither were blockbusters.

Sony said Chief Executive Kazuo Hirai will take a bigger role overseeing the movie business, keeping another office in California, to lead a turnaround.

He will also find a successor to Michael Lynton, who had headed Sony's entertainment but resigned earlier this month to take a position at Snapchat, it said.

Sony has a sprawling business, spanning music to household appliances, making it hard for it to do well constantly in every sector.

In the latest quarter, PlayStation 4 game software and machine sales and the contribution from its Virtual Reality headset called VR helped boost profits in that division. Its computer chip sector also fared well on the growth of image sensor sales for mobile products.

In its music business, best-sellers included Pentatonix's "A Pentatonix Christmas," Leonard Cohen's "You Want it Darker," and "Sayonara no Imi," by Nogizakia46, according to Sony.

Sony, known for inventing the Walkman portable player, suffered losses in its once prized TV business for years. Recent improvements highlight the company's renewed focus on profitability. It has also sold some assets, such as its Vaio personal computer business.

Sony is also enjoying a strong reputation for still and digital video cameras, but the company said an unfavorable exchange rate eroded such gains. Its smartphone offerings have failed to stack up against Apple's iPhone or Samsung Electronics Co.'s Galaxy line.

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