Sony posts 181 percent profit surge for Q1 2017

The Japanese electronics manufacturer's profits have recovered thanks to growth in sales of semiconductors, financial services, and image sensors.

Sony Corporation has posted a 180.5 percent year-on-year surge in operating profit for the first quarter of 2017, attributed mainly to increasing sales of semiconductors and Imaging Products and Solutions (IP&S).

Operating income for the quarter ended June 30, 2017 came to 157.6 billion yen, up 180.5 percent from 56.2 billion yen in Q1 2016; while revenue for the quarter reached 1.9 trillion yen, a 15.2 percent increase from the 1.6 trillion yen reported for the previous corresponding period.

While sales for Sony's Mobile division dropped 2.5 percent to 181.2 billion yen, operating income rose 771.3 percent to 3.6 billion, mainly due to reductions in operating costs and R&D expenses, the company said. The results mark a gradual recovery for the division, which the conglomerate previously considered leaving due to heavy competition and a decline in market share.

Semiconductor sales rose 41.4 percent year on year to 204.3 billion yen for the quarter, which was partly due to an increase in unit sales of image sensors for mobile products. As a result, operating income for the division rose to 55.4 billion yen from the 43.5 billion yen reported for the same quarter in the previous year.

Financial Services revenue rose to 303.2 billion yen, although the division saw a drop in operating revenue of 4.8 percent to 46.2 billion yen.

IP&S revenue increased from 122.2 billion yen to 155.6 billion yen, while operating income for the division rose 209.1 percent to 23.2 billion.

Music income increased 57.6 percent year over year to 25 billion yen; while Home Entertainment and Sound income rose 11.6 percent to 22.6 billion yen.

Games & Network Services income, on the other hand, declined 59.7 percent year over year, mostly due to the absence of first-party software title.

Sony took 27.5 billion yen in operating revenue during the quarter from the sale of manufacturing subsidiary Sony Electronics Huanan. Insurance as a result of the Kumamoto earthquakes also contributed 6.7 billion yen and 2.6 billion yen for the semiconductor and IP&S segments respectively.

Results for the quarter mark an improvement from this time last year, when Sony reported a 42 percent year-on-year drop in operating revenue, attributed to the "deterioration of operating results" in the semiconductors segment.

Q1 2016 revenue was down 10.8 percent year-on-year, which Sony blamed on earthquakes, foreign exchange rates, and the lull in life insurance purchasing.

As part of restructuring efforts, Sony ceased smartphone production in Brazil in June due to a lack of "fiscal incentives".

In 2015, the company also announced the slashing of 2,100 jobs globally from its struggling mobile communications segment by March 2016.

Part of restructuring efforts in recent years include the the development of new wearable devices, investing in Internet of Things chip technology, as well as acquisitions in chips and entertainment.

For the fiscal year ending March 31, 2018, Sony is expecting 8.3 trillion yen in sales and operating revenue and 500 billion yen in operating income.

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