Sony’s Pictures Division Achieves Breakeven in First Quarter

Sony’s “Pictures Division” made an operating profit of $3 million in the April to June first quarter, on revenue of $1.70 billion. The unit traditionally makes a loss in the first quarter of its Japanese parent’s financial year.

The numbers compared with a loss of $69 million on revenue of $1.59 billion in the 2018-19 financial year.

Overall the Sony group enjoyed revenues of $17.5 billion (an unchanged JPY1.93 trillion) and achieved net profits of $1.38 billion (JPY152 billion.) Earnings per share were reported as $1.08 (JPY119.22), which comfortably exceeded a consensus forecast of $0.79 per share by financial analysts.

For the full 2018-19 financial year to March, Sony produced a record breaking net profit of $8.26 billion (JPY916 billion), on revenues of $78.1 billion (JPY8.66 trillion). Profits at Sony’s “Pictures Division” rose to $489 million for the financial year to March 2019, compared with $376 million in the previous financial year.

Compared with a very weak comparable quarter in 2018-19, when theatrical revenues were worth just $34 million, the April to June quarter this time included $280 million of global box from “Men In Black: International,” “The Intruder” and “Brightburn.” There was also higher revenue from TV content sales. Lower sports costs and marketing costs in India were a positive for the segment.

For the current year, running to March 2020, Sony had previously issued guidance pointing to groupwide revenue up by just 2% to JPY8.8 trillion, and net income down by 45% to JPY500 billion. After publishing the first quarter results, the group trimmed its revenue projection to show a nominal decrease, but left the profit estimate unchanged.

For the “Pictures Division” the group is forecasting a full year increase in profits to JPY65 billion, or $590 million at current exchange rates.

In June, Sony received notice of a corporate breakup proposal by activist investor, Daniel Loeb, and his Third Point Fund, which has amassed a $1.5 billion stake, and called Sony one of the most undervalued large cap stocks in the world. In a sharply different approach from his 2013 assault on the company when he proposed the disposal of the entertainment businesses, this time Loeb wants Sony to keep entertainment and sell off its semi-conductor activities. (Third Point is a shareholder in Variety, alongside Penske Media Corporation.)

Sony’s stock finished trading in Tokyo on Tuesday at JPY5,852 per share, ahead of the results announcement. That is up 13% since June 1, when they stood at JPY5,168 apiece.

 

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