Sony’s Mobile Communications Division Reports $21.9M Loss as Sales Decline in Q2 FY2017
Sony Corp. reported Tuesday that its fiscal second quarter profit zoomed by 26-fold from the same period last year, augmented by the success of its image sensors and gaming products. Their highest ever profit ($1.15 billion) was attributed to thriving sales of image sensors used in smartphones and other devices.
The electronics firm forecast profit of JPY 630 billion ($5.57 billion) for the year ending March, from JPY 500 billion estimated three months ago.
Revenue recorded by the company’s Mobile Communications division primarily remained stagnant as compared to the same period last year. This was as a result of upswing in sales of the land line telecommunication and improved forex leverage which was neutralized by the faltering sales in the smartphone department. Sony sold nearly 3.5 million smartphones between the period of July and September which was 100,000 less than what Sony managed to register in the preceding year.
Sony’s latest financials show their phone department as the weak link. Sony’s Mobile communications section recorded a drop in the Operating loss from $32.5 million in Q3 2016 to $21.9 million in Q3 2017. According to Sony, this was due to the increase in price of the key components as well as the negative impact of appreciation of the yen against the U.S. dollar. Sony has suffered in recent years as it fell behind rivals like Samsung Electronics Co. of South Korea and Apple.
The tech company is now expecting smartphone sales to hit $6.8 billion in revenue over the entire 2017 fiscal year ending March 31st, which is roughly $352 million less as compared to the figure forecasted in August.
Mobile sensors contributed substantially over the last period. It is forecasted to record a profit of JPY 150 billion, which is up 20 billion yen from the earlier estimate and a turnaround from last year’s loss, as it recovered from earthquake damage which was sustained a year earlier. A business overhaul, recalibrating and banking on image sensors and games under Chief Executive Officer Kazuo Hirai has moved Sony out of a decade of sluggish growth and bolstered the firm’s stock price to a nine-year high.
Sony’s range of smartphones have not been a standout success story, particularly in markets such as North America. Sony had to write $1.7 billion off their mobile division’s value back in 2014. The only division in the tech giant’s armour to lose money was predictably its mobile division, and with increasing competition in the high-end and mid-range segments of the smartphone market, it’s an uphill task for Sony to make the division profitable again.