Sony Profits Beat Estimates; James Bond, Adele Offset Smartphone Sales Dip

Sony Corp. posted a better-than-expected third-quarter profit Friday, as its movies and music producing divisions helped offset a dip in sales of its image sensors used in high-end smartphones. Shares of the company, widely regarded as a major supplier of image sensors used in Apple Inc.’s iPhone, rose 6.1 percent ahead of its earnings announcement.

While Apple and Samsung, the world’s largest producers of mobile phones, reported slowing smartphone sales for the December quarter this week, Sony registered a 33 percent surge in net income to 120.1 billion yen ($997 million) in the December quarter. The company also maintained its outlook for full-year operating profit to grow to 320 billion yen ($2.65 billion) from 68.5 billion ($566.4 million) in the previous year.

The Japanese company credited strong sales of its PlayStation games — its largest unit — along with cost cuts for the improvement in the bottom-line. The company also cited record-breaking sales of the 24th James Bond movie “Scepter” and Adele’s latest album “25” for its strong performance in the December quarter.

Adele’s album, released in November, broke first-week sales records in multiple countries, and helped push Sony’s music revenue up 8 percent to $1.5 billion while the company’s pictures division, which includes its Hollywood ventures, saw an upswing of 26.9 percent in revenue to $2.1 billion in the quarter.

“Games, music and movies are now in a position to help out when the electronics business isn’t doing well,” Yoshihiro Nakatani, a senior fund manager at Asahi Life Asset Management, told Bloomberg. “From the credit market point of view, Sony has become a solid investment.”

Meanwhile, Sony struggled with declining revenues in some of its traditional consumer electronics businesses due to falling demand for its cameras, home entertainment systems, televisions and smartphones.

Demand for Sony’s mobile phones fell amid a slowdown in Chinese consumer sentiment, which pushed its sales down 15 percent during the quarter. The company’s devices business, which includes batteries and image sensors, fell 13 percent year-on-year, swinging to a loss of 11.7 billion yen ($96.7 million) from a profit a year earlier.

"Demand for image sensors from a specific customer has slowed since November due to a slowdown in the high-end smartphone market," Sony CFO Kenichiro Yoshida reportedly said at a press conference following the results, without specifying the customer name.

The company also announced that it will launch PlayStation VR, a virtual reality headset, by June 30.