Sony’s quarterly profit drops as quake impact lingers

Japan’s Sony Corp on Tuesday reported a 48 percent drop in operating profit for the July-September quarter as earthquake damage continued to affect its cash-cow imaging sensor business.

Second-quarter profit fell to 45.7 billion yen ($435.90 million) from 88.0 billion yen a year earlier. That compared with a Thomson Reuters Starmine SmartEstimate of 46.27 billion yen drawn from 10 analyst estimates.

The result came a day after Sony lowered its full-year profit forecast by 10 percent to 270 billion yen due mainly to an impairment charge of 33 billion yen brought about by the sale of its battery business.

Investors were unfazed by the downward revision as Sony maintained its sales outlook of 7.4 trillion yen, and losses related to the battery business sale had been flagged earlier.

Its shares closed down 0.7 percent ahead of the earnings release, compared with a flat finish in the benchmark Nikkei stock price index.

Emerging from years of restructuring, the consumer electronics manufacturer is refocusing its business to concentrate on videogames, entertainment and imaging sensors, and the sale of its battery business was part of that effort.

Its sensors business continued to struggle in the second quarter as a key factory damaged by a series of earthquakes in April took almost half a year to recover to pre-disaster levels.

The business is part of Sony’s semiconductor division, which swung to an operating loss of 4.2 billion yen from a year-before profit of 34.1 billion yen.

The company nevertheless trimmed its estimated quake impact on full-year earnings to 53.5 billion yen from 80 billion yen.

In gaming, operating profit fell to 19.0 billion yen from 23.9 billion yen as income earned abroad was dulled by a strong domestic currency.

Investors are betting on momentum in the gaming business to pick up toward the year-end holiday shopping season with the launch later this month of the PlayStation 4 Pro, an upgrade capable of rendering high-definition graphics.

Sony is also widely expected to build an early lead in the fledgling virtual-reality (VR) market, with a headset priced more modestly than those of rivals and available to its 40 million existing users of its flagship consoles.

Analysts said VR could help Sony attract non-core gamers to its PlayStation platform as the firm looks to extend content for the headset into non-gaming areas such as music, TV and film.

Source: Reuters