Sony’s downsized phone business just about returned to the black in fiscal Q1 2016 after benefitting from favourable foreign exchange rates and tactical withdrawals from tough markets, but the overall picture is not rosy.

The unit reported a JPY400 million ($4 million) operating income from the period, a sharp contrast to the JPY22.9 billion loss it booked in the same quarter a year ago, which it said was down “to the improvement in product mix” and restructuring of the business to move away from “unprofitable geographical areas”.

However, the long term impact of downsizing is still in the air, with the current quarter also bringing JPY4.4 billion positive impact from foreign exchange rates.

To put the results into context and provide the bigger picture on its smartphone unit, which has for years weighed on the group’s financials, sales actually decreased 33.7 per cent year on year, with total revenue reaching JPY185.9 billion, down from JPY280.5 billion in Q1 2015.

With the focus now on high end smartphones, and a shift away from the more competitive mid-tier range, Sony said it only sold 3.1 million phones in the quarter, compared to 6.7 million sold in the year ago period.

And for the full year, it said it only expects to sell 19 million smartphones in total.

Outside mobile
Its semiconductor business also took a hit, with sales decreasing 22 per cent year on year to reach JPY144.4 billion, from JPY187.4 billion, due to a decrease in image sensor sales.

The company said production was also hit due to the 2016 Kumamoto earthquakes, and lower demand for image sensors for mobile products.

Overall group performance was also hurt by the effects of the earthquake, with the company running a manufacturing operation nearby, as well as other factors.

Its games and network services unit meanwhile continued to perform well.

The consumer electronics giant posted JPY21.2 billion profit in total for the quarter, down from JPY82.4 billion, on sales of JPY1.61 trillion.