Published on August 1st, 2017 | by The GC Team0
Sony quarterly profits outstrip analysts’ estimates
Sony Corp. has reported a quarterly operating profit of 157.6 billion Yen (£1.1 billion) for the quarter ending June 2017, beating the average analysts’ projection of 133.3 billion Yen. Sales for the period also beat predictions, rising 15% to 1.86 trillion Yen.
Demand for the company’s camera sensors for smartphones, plus a strong music business and continuing sales of PlayStation 4 consoles and games, have helped Sony Corp emerge from a very challenging year, in which camera-chip production was hit by earthquake damage and the film division took a £760 million write-down, into a quarter that appears to confirm the company’s turnaround is on track.
Sony Corp CEO Kazuo Hirai, whose experience and background is in the company’s entertainment divisions, appears to be steadying the business, managing the music and films divisions into a longer-term future as Sony continues to vacate some of its more traditional consumer electronics positions.
Sony controls about half the market for image sensors – the chips that are at the heart of digital photography – and chip division revenue rose 41% to 204.3 billion yen. Demand for image sensors in the smartphone market remains high and is predicted to rise further.
In music, operating profit grew to 25 billion yen, benefiting from Sony’s partnership with Spotify Ltd., which has tripled paying subscribers to 60 million in the past two years. It has been reported that Sony and Spotify have struck a new licensing deal in which more of Sony’s music will be available only to paying Spotify users.
However, Sony remains cautious about the immediate future, maintaining its previous full-year profit guidance at 500 billion yen, in spite of a 3.8% elevation in the annual sales forecast. Chief financial officer Kenichiro Yoshida explained the company’s conservative outlook: “For one thing, we only had three months in this fiscal year” and pointing out that “variations of the macro-economic environment, and also cost and demand factors”, had to be considered.
Sony’s shares fell by 1.8% prior to the results, but are up 36% this year.