Over the last few years, Sony has undergone a restructuring of the company’s many sectors, reflected in the its earnings for the 2015 fiscal year, released this morning.
Overall however, these numbers show a 1.3 percent drop in the company’s revenue to ¥8.1 trillion, or about $71.7 billion USD.
Though this year’s earnings report shows several losses where senior management would have hoped to see gains, it also represents a renewed focus on gaming and entertainment assets throughout the company.
In addition, several insights about the success of Sony’s various branches were revealed. The Xperia mobile division reported a significant 20 percent loss in sales down to $9.97 USD. The company explains this as being due to a decision not to scale in order to improve profitability.
Furthermore, the mobile division experienced an operating loss of$544 million USD, which surpasses the losses predicted by Sony last year.
Sony’s devices branch is also facing several challenges. While sales overall increased by almost one percent year-on-year, the company experienced an operating loss of ¥28.6 billion, or $253 million USD after posting an ¥89 billion profit last year.
While a $528 million USD impairment charge is partially to blame, the company went attributes these losses to a decreasing demand for its mobile camera modules, which they’ve regularly supplied to almost all major smartphone manufacturers.
Several analysts have noted that the Sony’s comments combined with the losses on record suggest that the company may have lost a major smartphone client, though there’s been no word about which one.
Over the past few years, Sony has been altering its focus to towards higher-margin products such as sensors for consumer electronics. However, these losses seem to threaten a sector that was intended to lead this shift.
In a press conference, Kenichiro Yoshida, Sony’s chief financial officer told Reuters that “We have placed image sensors at the core of our growth story, so we take the deterioration in results there very seriously. The smartphone market has entered a stage of slow growth,”
The gaming division seems to offset the some of the company’s losses, having seen an 11.8 percent increase in sales to $13.74 billion USD and an operating income of $785 million USD.
The company attributes this to the superb performance of PlayStation software and hardware. Sony predicts that this division is likely to continue being a profitable one for the company. The PlayStation VR, which goes on sale later this year, is likely to increase these numbers even further.
Sales for the camera division haven’t seen much change since last year, recording a 1.7 percent decrease in sales to $6.29 billion USD. Operating income for this sector increased to $638 million USD because of what Sony describes as an improvement in the product mix of digital cameras and cost reductions.
The Home and Entertainment branch performed similarly, with a 6.4 percent decrease in sales. While sales contracted due to a decrease in purchases of LCD televisions, the operating income for this branch increased to $447 million USD.
Other sectors that were recorded in this yearly report included the motion Pictures department, which recorded a 6.8 percent increase in sales year-on-year due to television productions such as Breaking Bad, the Blacklist, and Better Call Saul. Sony’s music and recording department reported an increase in sales and operating revenue of 10.4 percent annually totalling $5.4 billion USD.
Other divisions of Sony’s many sectors includes the company’s financial, banking and insurance assets, which recorded essentially flat sales year-on-year.
The company did not issue any earnings guidance for the coming fiscal year as it assesses the impact of a series of earthquakes in the Kumamoto region of Japan that took place in April 2016. Sony stated that the earthquakes may have impacted production in its image plant in southern Japan.
It has postponed its forecast announcement to May 2016 and expects production to resume close to the end of May.
Related Reading: Sony Xperia becomes first non-Nexus device to join Android N developer preview
[source]Sony[/source]
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