PS4, smartphones power Sony to profit during third quarter
Game consoles, phones and exchange rates gave Sony a rosy quarter.
By Tim Hornyak | Published: 07:13, 06 February 2014
Sales of the PlayStation 4 and smartphones helped Sony turn a net profit of ¥27 billion (US$266 million) in the October to December quarter of last year, up sharply from a loss of ¥10.8 billion a year earlier.
The Tokyo-based electronics giant on Thursday reported revenue of ¥2.4 trillion, jumping nearly 24 percent from ¥1.9 trillion a year before.
Foreign exchange rates, smaller TV losses, PS4 sales, and better operating income in its financial services business contributed to overall operating income gains of ¥44 billion to ¥90 billion, Sony said.
Revenue at Sony's gaming unit was up 65 percent in the quarter to ¥442 billion from ¥269 billion a year earlier. The PS4's launch in North America, Europe, and Latin America and a favorable foreign exchange rate helped offset a sharp decrease in sales of the earlier PlayStation 3 consoles, Sony said. Operating income of the gaming unit rose to ¥18 billion from ¥4.6 billion.
The Mobile Products & Communications division, which includes Sony's beleaguered PC business, also saw robust sales gains for the quarter, posting a 45 percent year-on-year revenue gain based on brisk smartphone sales. But the unit still posted an operating loss of ¥12.6 billion, an improvement from a loss of ¥21.3 billion a year before.
The long-struggling TV business fared better in the period, with revenue at the Home Entertainment & Sound division up nearly 25 percent to ¥404 billion. Operating income was ¥6.4 billion, climbing into positive territory from a loss of ¥8 billion the year before.
TV sales themselves jumped 40 percent in the period to ¥255 billion, but the segment still made an operating loss of ¥5 billion.
Sony had no comment about a fresh rumor this week that it will sell its PC business, known for the Vaio brand. It said it "continues to address various options for the PC business" in response to a report that it is in talks with Tokyo-based investment fund Japan Industrial Partners. The Nikkei newspaper report said the deal would be worth roughly ¥40 billion to ¥50 billion, and that Sony was exiting PCs to focus on smartphones.
Last week, Sony denied being in discussions with Lenovo over a sale of the PC arm.
Sony's PC market share has suffered, dropping to 1.9 percent of worldwide PC shipments in the third quarter of 2013, down from 2.3 percent a year earlier, according to data from IDC. Sony shipped 1.5 million units during the quarter, down from 2 million a year before, and ranked ninth in market share.
Sony has been struggling to revive its fortunes under President and CEO Kazuo Hirai, who took the helm in April 2012 after a year in which the company had its worst results since its founding in 1946. Hirai announced 10,000 job cuts and the divestiture of non-core businesses.
Hirai kept his promise to return Sony to profit in the year to April 2013 after it sold off billions of dollars worth of assets including its U.S. headquarters. But despite Hirai's "One Sony" management plan, the company has continued to struggle.
The company's financial year runs from April through March.