Sony Pictures Stuck in Loss During First Quarter
Sony’s “Pictures Division,” which includes the Sony Pictures studio and TV networks, remained in loss in the first quarter of the financial year, despite a 7% increase in revenue.
At a corporate level, Sony saw its April to June revenues drop by 11% and profitability shrink.
The revenue increase at the Pictures Division was largely driven by the theatrical success of “The Angry Birds Movie” and higher TV advertising revenues in India and Latin America. Expressed in Japanese currency revenues increased to JPY183 billion, though in U.S. dollar terms they climbed by 20% to $1.78 billion.
The recent appreciation of the Japanese Yen complicated the Pictures Division’s operating result still further. The operating loss decreased by JPY1.0 billion yen year-on-year to JPY10.6 billion ($103 million.) “On a U.S. dollar basis, the operating loss increased slightly as the benefit from the increase in sales was more than offset by significantly higher worldwide theatrical marketing expenses in the current quarter,” the company said.
Sony revised its forecast for the Pictures Division’s full year to March 2017 downwards, by 9% in sales terms and by 12% for operating profit. Instead of forecasting a growth in sales when expressed in Yen it is now forecasting fractional drop to JPY920 billion, compared to the 2015-16 reported result of JPY938 billion. Instead of a growth in profits, the forecast operating profit is now for a barely changed JPY38 billion.
At the group level, Sony Corp’s sales and operating revenue decreased by 11% compared to the same quarter of the previous fiscal year to JPY1.61 trillion ($15.7 billion). Had the Japanese Yen not strengthened sales would have been reported as a 3% year-on-year decrease.
The revenue drop also reflected a significant decrease in smartphone unit sales, a decrease in revenues in the financial services segment due to the deterioration in investment performance at Sony Life Insurance. Sales also decreased in the semiconductors and imaging products segments due to the impact of the earthquakes in the Kumamoto region in 2016. Game and network services grew, driven by PlayStation 4 software sales.
Sony said that “Money Monster” had total gross revenues of $87 million ($46 million from North America, $46 million from international territories.) “Angry Birds” grossed $336 million globally ($105 million from domestic, and $231 million from international.) Late June release, “The Shallows” has accumulated $26 million during the quarter.
For the 12 months to end of June 2017, the studio has 18 theatrical releases, including the “Ghostbusters” reboot that is already in theaters, “The Magnificent Seven,” “Inferno,” and “Billy Lynn’s Long Halftime Walk” that fall within the current financial year.
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