Sony profit dives on strong yen, unit sale
Tokyo (AFP) – Japan’s Sony said Tuesday its first-half net profit dived as it was hit by a sharp rally in the yen’s value and losses linked to the sale of its battery business.
The electronics giant, which has been shedding assets as part of a broad restructuring, reported a 26 billion yen ($248 million) net profit in the six months through September, down nearly 78 percent from a year earlier.
Revenue in the first half of Sony’s fiscal year fell more than 10 percent to 3.3 trillion yen “primarily due to the impact of foreign exchange rates”, Sony said.
Sales in Sony’s mobile communications business slumped, while profitability in its memory chip and components businesses also suffered.
That partly offset strong demand for games on its hugely popular PlayStation 4 game console.
Last month Sony launched its new virtual reality headset, the PlayStation Virtual Reality (PSVR), in Japan and North America, joining Facebook, Samsung and Google in a market that analysts say could boost the global gaming sector.
PlayStation VR headsets work with PS4 consoles, more than 40 million of which have been sold globally.
Dozens of software titles for the device are in the pipeline, allowing players to fly like an eagle, drive sports cars in high-speed races and explore castles.
Tuesday’s first-half results came a day after Sony warned that it now expected a net profit of 60 billion yen in the year through March 2017, down by a quarter from an earlier forecast.
– ‘Not so bad’ –
It cited impairment charges and other costs linked to the sale of its battery division to Apple supplier Murata Manufacturing.
In July Sony cut its full-year sales forecast — trimming it to the current 7.4 trillion yen — as it blamed the surging yen and slower smartphone sales.
Japanese firms have benefited from a weak currency in recent years, which allows them to make their products cheaper overseas.
But the yen, which is seen as a safe bet, shot up since the start of the year as world markets were lashed by wild volatility and as uncertainty over Britain’s decision to leave the EU stoked demand for less risky investments.
Rival Sharp on Tuesday said it expects to post its first operating profit in three years and narrowed its net loss on the back of reforms and its buyout by Taiwan’s Hon Hai Precision, better known as Foxconn.
It was the first foreign acquisition of a major Japanese electronics firm and marked a watershed for Japan’s once-mighty home electronics sector, which nurtured global brands including Sony and Panasonic but has struggled in the face of foreign competition.
Panasonic has focused attention on lesser-known businesses, including energy and an auto division that makes various products found in vehicles, from electrical components to navigation systems.
But on Monday the firm blamed a strong yen and a poor showing in its solar panel business for cutting its profit and sales outlook.
Sony has also warned that a pair of deadly quakes in Japan in April would dent its bottom line.
The quakes, which caused major damage in southern Kyushu and claimed dozens of lives, forced Sony to temporarily shutter factories, hitting production and sales.
The once-iconic firm has been working to stay profitable after years of huge losses, under a painful restructuring that has included layoffs and asset sales.
“Even if Sony’s balance sheet may not look very attractive, it is still on course to a recovery,” Hideki Yasuda, an analyst at Ace Research Institute in Tokyo, told AFP.
“If we don’t count one-time factors, such as the impact of the Kumamoto earthquakes, Sony’s earnings are not so bad.”