Sony Corp. reported a smaller loss than expected in the second fiscal quarter as PlayStation 4 sales limited the impact of a writedown of its smartphone business.
Japans Sony stated a net loss of ¥136.0 billion, highly due to the ¥180 billion book value reduction of its Xperia unit. Since the company announced the writedown in September, analysts had been expecting a bigger loss of ¥148.06 billion. During the same period last year Sony reported a loss of ¥19.6 billion.
Changes in the troubled unit are mandatory as Sonys CEO Kazuo Hirai has said before that the mobile segment is one of the three pillars of the companys future, including plans to take the third spot in the global smartphone market, after Apple and Samsung.
However, with the increased competition in the market, mainly by low-cost Chinese smartphone manufacturers, Sony recognized flaws in its strategy and may no longer seek the number three spot. The mobile communication division ended the quarter with an operating loss of ¥172 million.
According to the latest information compiled by the International Data Corporation, Xiaomi, which reported nearly tripled shipments in the recent quarter, took the third place with a 5.3% share of the global smartphone market. Samsung accounted for a 23.8% share of all deliveries, while Apple had a 12% share.
Sony reported an operating loss of ¥85.6 billion during the quarter ended on September 30th. The revenue, on the other hand, rose nearly 7% to ¥1,901.5 billion due to strong performance by its game and services division, which reported an 83.2% increase in revenue and an operating profit of ¥21.8 billion, highly boosted by the release of the Play Station 4.
According to data compiled by Bloomberg, the PS4 outsold its direct competitor, Microsofts Xbox One, by about 97% since the two consoles were released on the market in November.
Sony projected full-year operating profit of its gaming division will rise 29% to ¥35 billion. The company also estimated a better performance of its imaging products and devices units, which both achieved better Q2-operating income year-to-year to ¥20.1 billion and ¥29.6 billion respectively.
However, Sony downgraded its full-year smartphone sales target to 41 million units. This is the second time the company cuts its projection, after in July Sony reduced its goal from 50 million to 43 million units.
Sony Corp. gained 0.83% on Friday to close at ¥2 072 in Tokyo, marking a one-year increase of 10.39%. The company is valued at ¥2.3 trillion. Meanwhile, the stock gained 1.96% in New York and closed at $18.72. According to the Financial Times, the 16 analysts offering 12-month price targets for Sony Corp. have a median target of ¥2 025, with a high estimate of ¥3 000 and a low estimate of ¥1 400. The median estimate represents a -2.27% decrease from the last price of ¥2 072.
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