Sony Set for Record Profit, Gives Cautious Tone
Sony Corp posted its best ever profit for the first quarter on Tuesday, as it took a big step towards its highest result for a full year in the past 20 years.
Results were driven from demand from makers of smartphones for its image sensors in high-end handsets that have twin cameras on the rear.
However, the record posting took place with little fanfare, as Sony lowered its annual forecast for sales of its image sensor as smartphone clients in China shift to less expensive options for handsets that are lower priced.
Sony also forecast previously a drop in its sales for its flagship, yet quickly maturing game console PlayStation 4.
CFO at Sony Kenichiro Yoshida announced that when the company posted strong years a decade ago or two decades ago it was always followed by a steep setback the next year and then onwards.
The Japan-based conglomerate, renowned for making the first portable cassette player during the 1970s, has gone under a restructuring recently as competition in prices for its consumer electronics division dragged profit growth down.
CEO Kazuo Hirai has refocused Sony on sensors and games and saw share price of the company increased by close to 40% in 2017 touching a high of nine years.
The success at the box office of Spider Man: Homecoming has fueled the hopes for an increase in earnings for the Sony pictures business that is also going through its own restructuring plan.
With its newfound strength, Sony has ventured into acquisitions. This week it announced the acquisition of the majority of the distributor for the English language versions of One Piece and Dragon Ball Z.
In addition, on Tuesday the company announced that operating profit had increased close to three-fold during its April through June quarter to more than $157.6 billion yen equal to $1.43 billion, which exceeded the previous record for a first quarter by almost 30%, and beat analyst estimate that were similar.
The surge in profit reflected the recovery for image sensors from damage from an earthquake sustained last year, said the company. Sony’s division for semiconductors, which includes the sensors, posted a 55.4 billion yen profit, reversing a loss from last year.
However, Sony cut its sales outlook for the full year for its sensors, issued one quarter ago, by almost 3% as phone makers in China shift from building handsets that are high end that Sony has typically targeted.
It usual pillar for growth, gaming, plunged almost 60% in profit for the quarter due to no blockbuster software titles as well as price cuts in its PlayStation 4.