Sony came out ahead of analyst estimates with a smaller-than-expected second quarter loss thanks primarily to increased demand for its PlayStation4 game console. However, overall losses widened to 136B yen ($1.2B) from 19.6B yen in the comparable period in 2013 as the mobile phone unit bled $1.58B. Sales and operating revenue were up overall by 7.2% compared to the same period last year at $17.4B. The games and network services segment recorded an 83.2% bump in sales and revenue to $2.8B which Sony attributed to both PS4 hardware and software demand. The company upped its operating profit forecast in the division by 10B yen ($89.7M) to 35B yen ($314M).
In the movie unit, sales increased 2.4% on the same time frame last year to $1.64B. However, that was a 3% drop on a constant currency U.S. dollar basis which the entertainment and electronics giant said was primarily due to a decrease in theatrical revenues. Last year, Sony had more movies in the market during the quarter. This year it did have a big hit with 22 Jump Street which began rolling out ahead of the World Cup and played steadily over the summer with global box office of about $330M. Sex Tape and Deliver Us From Evil were the other major titles Sony had in the global market through the quarter’s end of September 30. The forecast for the division dropped slightly to 58B yen ($520M). Its currently got Fury on release and has Annie and The Interview on deck in December. On a conference call this morning in Tokyo, the company said regarding the movie division that profit needs to be increased and that “if necessary” investments will have to be made. Operating loss in the division saw a marked decrease from 17.8B yen to just 1B ($9M), which Sony put down to higher marketing expenses last year and the underperformance of White House Down.
Home entertainment and television licensing revenues were higher this go-round compared to last year, helped by the releases of The Amazing Spider-Man 2 and Heaven Is For Real as well as TV sales of Men In Black 3 and the first Amazing Spider-Man. Across the company, Sony maintained its forecast for a full-year net loss of 230B yen ($2B).
The Q2 results are the first announced since activist investor Daniel Loeb sold his shares in Sony months after pushing for a partial spinoff of its entertainment units and improvement in its bottom line led to thousands of layoffs at its entertainment, TV and PC units. In an October 21 letter, Loeb said he had realized a nearly 20% profit despite Sony’s continued challenges.