Sony Corp. reported Tuesday a 1.1 percent drop in first quarter operating profit, which is better than analyst expectations. According to the company, customers needed to be entertained at home, that’s why.
Decline, but Better
Financial officer for Sony Corp., Hiroku Totoki, acknowledged the contribution of its gaming division which the consumers relied on as people stayed at home during the pandemic.
The Tokyo-based multinational company reported Tuesday a 228.4 billion yen (US$2.15 billion) for the months April to June, against a 230.9 billion yen from the same period from last year. The result surpassed analyst expectations of 143.21 billion yen ($1.36 billion).
Shares for the tech/media company soared by 17 percent. This is Sony’s highest for about twenty years. The company also disclosed its plans of buying back around 100 billion yen (roughly $950 million) worth of shares, 1.64 percent.
The Japanese conglomerate also projected decline in profits by 26.7 percent to 620 billion yen ($5.87 billion) for the year until March 2021. This would be the company’s lowest in four years. Nonetheless, the forecast is still better than its previous 30 percent estimate.
Sony also expects profit for its gaming division to increase to 240 billion yen ($2.27 billion). This could likely be helped by its Playstation 5 launch in the holiday season and continued increase in software sales.
— PlayStation (@PlayStation) August 3, 2020
Part of Sony’s efforts to diversify its business portfolio include investing to Bilibili, a Shanghai-based video sharing site, and video game/software developer Epic Games, Inc. which is responsible for immensely popular “Fortnite.”
Other Major Divisions
Meanwhile, its image sensor unit is expected to garner 130 billion yen ($1.23 billion). This is lower than last year’s 235.6 billion yen ($2.23 billion). Sony is a supplier of camera sensors for international smartphone companies like Apple and Huawei. Although a research body forecasts a 12 percent drop in global market for smartphones. However, Sony could still recover some losses with many companies’ shift to phone cameras with more than one lens.
Sony Corp. also owns a major Hollywood studio, Sony Pictures, which also saw losses amid closure of theaters. Ticket sales dropped to $6 million. Last year’s same quarter saw $164 million. Because of the pandemic, the company was not able to release completed films in theaters. Many of the titles were postponed for next year.