Sony’s Pictures Division Reports Loss Of $719M; Company’s Overall Net Profit Takes 50% Hit

Sony has recorded a full-year net profit of $655M, a 50% fall from the previous year, while its Pictures division posted a loss of $719M year-on-year, driven by box office underperformance. Sales and operating revenue for the division sat at $8B overall.

The results fall in line with the company’s recent revision of results: It’s nine month results saw a $913M loss in the Pictures division, largely related to a $962M impairment charge of goodwill, which was included in Sony’s full year figures. It said it expected the division to return to profit after the write down.

The company, led by CEO Kazuo Hirai, said the overall company decline was impacted by foreign exchange rates. Its annual operating profit sat at $2.57B, down 1.9%. On a constant currency basis, Sony said overall sales were essentially flat year-on-year, due to significant increases in its gaming services and its electronics business offset by a significant decrease in mobile communications segment sales. Overall sales and operating revenue for the company sat at $67.9B for the year, down 6.2% year-on-year.

The Pictures Division reported sales and operating revenue of $8B, a 3.7% fall in Yen and 5% hike in U.S. dollars. Increase in sales on a U.S. dollar basis was primarily due to higher sales for Television Productions and Media Networks. Television Productions were driven by higher SVOD revenues for programs such as The Crown and Baz Lurhmann’s music-driven drama The Get Down, while Media Networks was driven by higher advertising and subscription revenues mainly in India, Latin America and the U.S. Operating loss at $719M was recorded in the division, compared to an operating income of $346M last year.

Sony said that operating results for the Pictures division were “negatively impacted by higher programming and marketing expenses.” The division’s fourth quarter reported its best performance of the fiscal year, with revenues sitting at $2.66B.

The Ghostbusters reboot, which was largely hoped to be a big summer blockbuster for the company, failed to meet expectations last year, generating $229M in box office revenues worldwide while The Magnificent Seven underperformed with a $162M worldwide tally. The company scored some success with lower-budgeted projects such as Sausage Party and Don’t Breathe, which took $136.8M and $151.4M respectively. Last year, the Pictures division was boosted by the theatrical performances of hits such as Spectre ($881M) and Hotel Transylvania 2 ($470M).

For its 2018 financial year, Sony forecasts its biggest overall operating profit in 20 years, expecting the company’s results to surge to $4.5B.

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