Sony Reports Quarterly Loss, Holds Forecast to Assess Quakeby and
Group outlook to be released after reviewing earthquake damage
Parts of Kumamoto plant to resume operations in late May
Sony Corp. reported a fourth-quarter loss after booking a charge against its chip business and delayed giving a full-year forecast to assess damage from an earthquake that shut its main plant for camera sensors.
The net loss was 88.3 billion yen ($812 million) in the three months ended March, the Tokyo-based company said in a statement on Thursday. Sony, which also recorded its first full-year profit in three years, will probably see annual net income in the current fiscal year rise to 212.2 billion yen, according to the average of estimates compiled by Bloomberg.
Slowing demand for smartphones has hurt shipments of image sensors, a business that has helped to bolster profits as Chief Executive Officer Kazuo Hirai shifts the company away from consumer electronics. Sony will have to generate more of its earnings from PlayStation 4 gaming consoles, streaming services for its 50 million online users as well as movies and music.
“Hirai’s first three years as a president were about restructuring,” Chief Financial Officer Kenichiro Yoshida told reporters after the earnings announcement. “The next phase will be seizing opportunity.”
While Sony didn’t release projections for whole company, it issued forecasts for some divisions. Operating income in pictures will rise 12 percent to 43 billion yen, while music earnings will drop 28 percent and profit from financial services will decline about 4 percent to 150 billion yen. The company will give a full outlook on May 24.
Shares of Sony fell 2.1 percent to 2,778 yen at the close in Tokyo before earnings were released. The stock is down 7.5 percent this year, compared with a 13 percent decline in the Topix index.
Sony’s games and network services business reported a 5.1 billion yen profit in the quarter. The company is looking to cement its lead over Microsoft Corp.’s Xbox One and Nintendo Co.’s Wii U consoles by launching a virtual-reality headset this year. The PlayStation VR will be available to the more than 36 million people who already own a PS4 when it goes on sale in October for $399.
“The PS4’s adoption is advancing at a pace unmatched by previous consoles,” Yoshida said. “This will continue to be one of our most important businesses.”
The company booked a 59.6 billion yen impairment charge for the business that makes camera modules, citing “a decrease in projected future demand.”
Apple Inc., which uses Sony’s CMOS sensors for its cameras, this week forecast its second straight decline in quarterly sales while the global smartphone market is projected to grow at the slowest pace on record.
Some parts of Sony’s Kumamoto factory will reopen at the end of May, after the company shut down operations following damage to the building, clean rooms and equipment during this month’s earthquake on the southern island of Kyushu. The facility is the primary manufacturing site for image sensors used in digital and security cameras as well as micro-display devices.
Global smartphone sales growth will probably slow to 7 percent in 2016, Gartner Inc. forecast in March. While users in mature markets are holding on to their handsets longer, potential buyers in Asia may delay upgrading theirs until the functionality and pricing of low-cost devices improves and makes them more desirable, the researcher said.
Sony’s film unit, including the Columbia studio, posted earnings of 52.3 billion yen to be the company’s profitable business for the quarter. The mobile phone unit lost 42.1 billion yen in the quarter and home entertainment lost 7.3 billion yen.