Mobile proves a drag on Sony profit - to the tune of $1.6B

Mobile proves a drag on Sony profit — to the tune of $1.6B

31 OCT 2014

Sony made a much bigger loss during its fiscal second quarter compared to a year earlier after being weighed down by its Mobile Communications business.

The Mobile Communications segment achieved sales and operating revenue of JPY308.4 billion/US$2.76 billion (up 1.2 per cent) during the company’s fiscal Q2. However it recorded an operating loss of JPY172.0 billion, compared to a JPY8.8 billion operating profit a year earlier.

The operating loss in mobile was largely a result of an impairment charge of goodwill of JPY176.0 billion ($1.58 billion), as the company devalued the business unit.

The quarter also saw an increase in marketing expenses and research and development expenses in Mobile Communications as the company looked to expand sales channels.

The revenue increase for the business was driven by the favourable impact of foreign exchange rates, partially offset by a decrease in sales.

The company’s overall sales and operating revenue was JPY1.90 trillion (a 7.2 per cent year-on-year improvement) but it reported a net loss of JPY136 billion ($1.2 billion).

The increase in revenue was driven primarily by an increase in sales in the Game & Network Services segment, particularly sales of the PlayStation 4, an increase in sales in image sensors in the Devices division, and favourable exchange rate shifts.

The company said the revenue increase was offset by a “significant decrease” in sales from the All Other segment, largely related to the company’s exit from the PC business.

Sony this week appointed senior vice president Hiroki Totoki as the new head of its mobile division in the hope of reviving its smartphone business, which has been struggling recently. It is not a top five smartphone vendor anymore.

Sony initially set a target of hitting sales of 50 million smartphones by the end of its financial year in March 2015, which it revised to 43 million. It is now considering further reducing that figure “by several million units”.


Tim Ferguson

Tim joined Mobile World Live in August 2011 and works across all channels, with a particular focus on apps. He came to the GSMA with five years of tech journalism experience, having started his career as a reporter... More

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