You are using an older browser version. Please use a supported version for the best MSN experience.

Sony posts $205M profit as downsized mobile business stops bleeding cash

ICE Graveyard 28/07/2016 Jon Russell

Sony posted a slim ¥21.2 billion ($205 million) profit for its Q1 2016. That’s down on the ¥82.4 billion profit it carded this time last year, but in general the quarter was a mixed bag of positives and negatives following the impact of cost-cutting initiatives.

We already knew the firm would take somewhat of a hit this quarter after it warned of the impact that the Kumamoto earthquake had on its image sensor facility based in the province. Revenue for the three-month period came in at ¥1.613 trillion ($15.662 billion), down 11 percent annually.

Beyond the quake, Sony said its financial dip came down to a strong yen — a factor that Nintendo cited in its earnings yesterday — “the deterioration in investment performance” in its Sony Life business, and the downsizing of its smartphone business, which brought in 33 percent less revenue than one year previous.

There’s a positive side to Sony Mobile’s performance however — it is now at breakeven. Slowing growth and increased competition in the smartphone market had weighed on Sony’s previous financials, with the smartphone business alone responsible for a $544 billion loss last year. So it is quite notable that its mobile communications division posted a very slender ¥185.9 million ($4 million) operating profit for the quarter.

That, Sony said, was down to tactical withdraws from tougher markets, and shift away from mid-range phones where competition is fiercest, towards higher-end devices with better margins.

News was better for Sony’s PlayStation business, which surpassed 40 million consoles sold to date in March.

Sony’s games and network unit was the stellar performer, accounting for the most revenue across the firm. It posted an operating profit of ¥44 billion ($427 million), up 126 percent year-on-year, on revenue of ¥330.4 billion ($3.2 billion) for the quarter, up 14.5 percent.

That impressive rise, Sony put down to increased PS4 game and console sales, as well as some cost reductions made internally, including lower marketing spend — which makes sense for a console first launch in 2013.

image beaconimage beaconimage beacon