BENGALURU: Global behemoth Sony Corporation reported a growth of 5.8 per cent in its sales and operating revenue to JPY1.8909 billion (USD 17,920 million) for the quarter ended 30 June 2014 (Q1-2015) as compared to the year ago quarter’s (Q-2014) JPY 1,711.40 billion.
Note: (1) Rs 100 lakh = Rs100,00,000 = Rs 1 crore = Rs 10 million.
(2) JPY = Japanese Yen
(3) 31 Jul 2014 02:40 UTC - 1 Aug 2014 02:44 UTC
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The company’s operating income before taxes went up by 50.6 per cent to JPY68.4 billion in Q1-2015 as compared to the JPY 45.4 billion in Q1-2014. Sony’s net income attributable to its stockholders in Q1-2015 increased over seven fold (7.6 times) to JPY 26.8 billion in Q1-2015 as compared to the JPY 3.1 billion reported for the quarter ended 30 June 2014.
One of the biggest disappointments for the company this quarter is the performance of its Mobile Communications (MC) segment which reported an operating loss of JPY2.7 billion as compared to an Op Inc of JPY12.6 billion in Q1-2014. (Please refer to Additional notes 1 and 2 below). The company attributes the loss primarily to an increase in marketing and R&D expenses which did not yield the expected increase in unit sales, primarily in the midrange handsets. For the full year, Sony has lowered unit sales forecast from 50 million units to 43 million units.
Of the nine segments that add to Sony’s numbers, major contributions to its bottomline in Q1-2015 were made by Financial Services (Operating Income or Op Inc of JPY 43.8 billion) followed by Imaging Products and Solutions (Op Inc JPY 17.4 billion) Devices (Op Inc JPY 12.5 billion), and Music (Op Inc JPY 11.4 billion). Of note is the turnaround of the company’s Game and Network Services (GNS) segment which returned an Op Inc of JPY 4.3 billion in Q1-2015 as compared to an operating loss reported in Q1-2014 of JPY 16.4 billion.
The company’s Home Entertainment & Sound (HE&S) segment reported improved Op Inc of JPY 7.7 billion from JPY 3.4 billion in Q1-2014. Sony’s Pictures segment also reported an improvement in its Op Inc in Q1-2015 to JPY 7.8 billion, which was more than double the JPY 3.7 billion in the corresponding quarter of last fiscal.
The recently realigned All Other segment reported operating loss of JPY 18.4 billion in Q1-2015 (JPY 16.9 billion in Q1-2014). Sales of the All Other segment decreased 33.8 per cent year-on-year (a 39 per cent decrease on a constant currency basis) to JPY 128.8 billion. Sony says this decrease was primarily due to a significant decrease year-on-year in unit sales of PCs reflecting Sony’s exit from the PC business. The operating loss of this segment increased primarily due to the recording of PC exit costs, partially offset by an improvement in equity in net income (loss) for Intertrust Technologies Corporation.
(1) Sony realigned its business segments from the first quarter of the fiscal year ending 31 March 2015 (the current quarter) to reflect modifications to its organisational structure as of 1 April 2014, primarily repositioning the operations of the previously reported Game and Mobile Products & Communications (MP&C) segments.
(2) In connection with this realignment, the previously-reported operations of the network business which were included in All Other have been integrated with the previously-reported Game segment and are now reported as the Game & Network Services “G&NS”) segment. The previously reported Mobile Communications category which was included in the MP&C segment has been reclassified as the newly established Mobile Communications (MC) segment, while the other categories in the previously reported MP&C segment are now included in All Other. This includes the reclassification of the PC business into All Other.
(3) In addition, as of the current quarter, the power supply business, which was previously included in the Devices segment, has been integrated into All Other to reflect modifications Sony made to its organisational structure as of 1 June 2014.
(4) In connection with these realignments, the sales and operating revenue (sales) and operating income (loss) of each segment in the fiscal year ended 31 March 2014 have been reclassified to conform to the presentation of the fiscal year ending 31 March 2015.