Sony Posts $1billion Profit In Q4 2015 Inspite of Staggering Smartphone Sales


Sony Corporation has announced its consolidated financial results for the third fiscal quarter (Q4) ended December 31, 2015 (October 1, 2015 to December 31, 2015) showing a slight profit of about $1billion for the period under review.

In its submission, the company said that overall “sales and operating revenue increased by 0.5% compared to the same quarter of the previous fiscal year to 2,580.8 billion yen (21,507 million U.S. dollars)”. This it attributed not to its staggering smartphone sales, which of course has drastically dropped, but “mainly due to increases in Game & Network Services (“G&NS”) segment sales, reflecting a significant increase in PlayStation®4 software sales, and in Pictures segment sales, reflecting a significant increase in Motion Pictures sales”. The financial result shows a substantially offset by decreases in Mobile Communications segment sales, reflecting a significant decrease in smartphone unit sales, and in Devices segment sales, primarily reflecting a significant decrease in image sensor sales.

The company’s Operating income equally increased by 20.1 billion yen year-on-year to 202.1 billion yen (1,685 million U.S. dollars). This increase was primarily due to improvements in the results of All Other, the Pictures segment, the MC segment and the G&NS segment. However, the device segment suffered loss in the operating results. In the report, Sony described its device segment as deteriorating, indicating that sales decreased by a margin of 12.6%. it would interest you to know that the sharp drop in mobile sales resulted in an overall increase in its revenue to a mere 0.5%, thereby resulting the meager profit of $1billion it posted.

The financial report also says that Sony’s Operating income in mobile communication increased by 13.8 billion yen year-on-year to 24.1 billion yen (201 million U.S. dollars). This significant increase was primarily due to an improvement in product mix reflecting a shift to high value-added models, as well as reductions in costs including marketing, research and development and other selling, general and administrative expenses, partially offset by the above-mentioned decrease in smartphone unit sales and the negative impact of the appreciation of the U.S. dollar, reflecting the high ratio of U.S. dollar-denominated costs. During the current quarter, there was an 18.8 billion yen negative impact from foreign exchange rate fluctuations.

You will recall that Sony is restructuring its operations to concentrate on more profitable ventures only. To this end, it had sold its stake in game maker Square Enix and the announcement in 2014 that it was discontinuing the sale of Vaio personal computer. So, as it stands, the bulk of the company’s revenue seem to be coming from sales accrued from PS4 game software and pictures. How long would this continue before the restructuring become visibly profitable?

Has Sony bowed to the strong competitive market, are they struggling to survive? What would be its next card to play? Let us hope the upcoming release of Sony Xperia Z5 in the US in the coming weeks will help boost its sales.

Read full financial report.

Sony Corporation was founded by Masaru Ibuka, Akio Morita. The Japanese multinational conglomerate corporation is headquartered in Kōnan Minato, Tokyo, Japan. Its diversified business includes consumer and professional electronics, gaming, entertainment and financial services. The company is one of the leading manufacturers of electronic products for the consumer and professional markets and is ranked 116th on the 2015 list of Fortune Global 500. It’s subsidiary, Sony Mobile Communications Inc. (formerly Sony Ericsson) is a multinational mobile phone manufacturing company headquartered in Tokyo, Japan. It focuses exclusively on the smartphone market under the Xperia name.

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