Sony Corporation just announced its financial results for the first quarter of fiscal year 2016, with all income numbers in the black despite an overall decrease across the board year on year.
“Sales decreased by 10.8% compared to the same quarter of the previous fiscal year (“year-on-year”) to 1,613.2 billion yen (15,662 million U.S. dollars). This significant decrease was mainly due to the impact of foreign exchange rates, a decrease in Mobile Communications (“MC”) segment sales reflecting a significant decrease in smartphone unit sales, a decrease in revenues in the Financial Services segment due to the deterioration in investment performance in the separate account at Sony Life Insurance Co., Ltd. (“Sony Life”), as well as decreases in sales in the Semiconductors and Imaging Products & Solutions (“IP&S”) segments due to the impact of the earthquakes in the Kumamoto region in 2016 (“2016 Kumamoto Earthquakes”). This decrease was partially offset by an increase in Game & Network Services (“G&NS”) segment sales reflecting increases in PlayStation 4 (“PS4”) software sales. On a constant currency basis, sales decreased 3% year-on-year. For further details about the impact of foreign exchange rate fluctuations on sales and operating income (loss).”
“Operating income decreased 40.7 billion yen year-on-year to 56.2 billion yen (546 million U.S. dollars). This significant decrease was mainly due to the deterioration of operating results in the Semiconductors segment, partially offset by an improvement in the Game & Network Services and MC segments.”
As usual, PS4 played a major roles in the quarter’s performance. It was one of the segments that actually increased its performance year on year, offsetting negative results in other businesses mostly due to increasing software sales. The console shipped 3.5 million units between April 1st and June 30th, bringing the total of shipments to 43.5 million units. This 0.5 million units higher than first quarter shipments last year.
We also get a breakdown of results of the Game & Network services segment, which includes the PlayStation and PlayStation Network businesses.
“Sales increased 14.5% year-on-year (a 25% increase on a constant currency basis) to 330.4 billion yen (3,208 million U.S. dollars). This significant increase was primarily due to a significant increase in PS4 software sales including sales through the network, partially offset by the impact of foreign exchange rates and decreases in PlayStation 3 hardware and software sales.
Operating income increased 24.6 billion yen year-on-year to 44.0 billion yen (427 million U.S. dollars). This significant increase was primarily due to the above-mentioned increase in PS4 software sales and PS4 hardware cost reductions, partially offset by an increase in marketing costs. During the current quarter, there was a 1.3 billion yen negative impact from foreign exchange rate fluctuations.”
Quite interestingly, we get a breakdown of sales to customers, split between hardware, network and other, with network revenue getting the lion’s share.
Last, but not least, we get the results forecast for the current fiscal year. Compared to the forecast published in May, revenue has been revised downwards, both for the whole company and for the Game & Network services, but income figures have not been changed.
The company also still predicts to sell 20 million PS4 units during the full fiscal year, bringing the total to 60 million.
“Sales are expected to be lower than the May forecast due to the impact of foreign exchange rates, partially offset by an increase in PS4 software sales, including sales through the network. The forecast for operating income remains unchanged from the May forecast mainly due to the above-mentioned increase in PS4 software sales, offset by the negative impact of foreign exchange rates and an increase in marketing costs.”