Sony reports 57% drop in Q4 profit, declines to give outlook
Japan's multinational conglomerate Sony Corp. on Wednesday reported a drop for its fiscal fourth quarter to March and declined to provide forecast for this year due to the hit of the COVID-19 outbreak.
Sony's profit tumbled 57 percent in the fourth quarter to 35.4 billion yen (331 million U.S. dollars), compared with the 73.77 billion yen average of nine analyst estimates compiled by Refinitiv.
The company's annual net profit dropped 36.5 percent to 582 billion yen (5.43 billion U.S. dollars) for the year that ended in March, mainly affected by the coronavirus disruption, especially its smartphone image sensors, cameras and TVs.
Operating profit for the year ended March came to 845.46 billion yen, falling 5.5 percent from the previous year following two consecutive years of record highs.
The impact from the outbreak reduced full-year profit by 68.2 billion yen, of which 35.1 billion was in the consumer electronics business, Sony said.
Uncertainty over the economic impact of coronavirus lockdowns continues to linger, making it hard to predict sales of consumer gadgets later in the year.
Sony has halted production at some plants as governments around the world imposed lengthy restrictions on movement and business activity to contain the virus.
Electronics products and theater movies hit hard
"The outbreak hit hard sales of its electronics products and theater movies, while affecting production lines," said Hideki Yasuda, an analyst at Ace Research Institute in Tokyo.
Games downloads grew but music business income fell as events were cancelled owing to the pandemic.
"Sales of image sensors remain strong, leading Sony's performance. Demand for image sensors is expected to grow further as high-spec smartphones equipped with multiple lenses are becoming more popular," he added in comments before the earnings were released.
Gaming business gains amid coronavirus
The company's gaming business saw a positive impact of 2.8 billion yen from the outbreak, as consumers staying at home look for entertainment. It reported a smaller-than-expected 28 percent fall to 46.2 billion yen in fourth-quarter profit despite the aging PlayStation 4.
The gaming business is likely to be a bright spot for Sony amid strong uncertainty this year as it is scheduled to launch its PlayStation 5 (PS5) during the year-end holiday shopping season, seven years after its previous generation games console.
For the image sensors business, another growth driver along with gaming, Sony said it will closely monitor the smartphone market.
Sony controls 51.5 percent of the world's 15 billion U.S. dollars image sensor market, according to data provider Gartner, supplying most global smartphone makers including Apple Inc. and Huawei Technologies Co Ltd.