Sony Corporation (TYO:6758) (NYSE:SNE) posted disappointing second quarter results on Thursday. The company incurred a net loss of 19.3 billion yen or $196 million. Revenues were up 11% to $18.1 billion, helped by weakening yen. The Japanese electronics giant has been struggling to regain its past glory. The company had reported a profit of 3.48 billion yen in the April-June quarter. But weak sales of gaming consoles, personal computers, TVs and video cameras pulled the company back into the red.
Sony’s pictures business biggest disappointment
Sony Corporation (TYO:6758) (NYSE:SNE) said the biggest drag on its earnings was Pictures division. The Pictures business produces movies and TV shows. It recorded a net loss of 17.8 billion yen due to some high-profile flops including White House Down. The division had earned a profit of 7.9 billion yen in the same period a year ago. The division was also hurt by a decline in TV licensing revenues.
Here’s a round up of hedge funds’ May returns
Tyro Absolute Return Fund was down 1.5% for May. The fund's main contributors in May were Super Micro Computer, which gained 1.6%, Shyft Group, which was up 1%, and GCI Liberty, which gained 1%. Detractors in May include Recro Pharma, which fell 2.6%, index shorts and hedges, which declined 2%, and DXC Technology, which was Read More
Sony Corporation (TYO:6758) (NYSE:SNE)’s TV business was another blow, reporting a loss of 9.3 billion yen. TV demand is slowing around the world. And fierce competition further hurt Sony’s TV sales. The company’s gaming division also incurred losses for the quarter ending September 30. Earnings at the gaming business were hurt as the company slashed the price of its PlayStation Vita gaming consoles. Sony noted that PS Vita consoles were not selling very well as more and more users play games on their tablets and smartphones. So, the company had reduced prices to boost sales. The gaming division suffered a loss of 800 million yen, compared to a profit of 2.3 billion yen in the corresponding quarter last year.
Sony slashes forecasts
The electronics giant lowered its earnings forecast by 40% for the year ending March 2014. Sony Corporation (TYO:6758) (NYSE:SNE) now expects a profit of 30 billion yen ($305 million), compared to the previous projection of 50 billion yen. Sony is under intense pressure from the hedge fund manager and a major shareholder Daniel Loeb. Loeb had proposed a break-up of the company, which Sony rejected.
Anyway, the company’s smartphone sales remain strong, reports BBC News. Sony Corporation (TYO:6758) (NYSE:SNE) estimates they will sell 42 million smartphone units in the current fiscal year. Only two of Sony’s eight divisions – financial services and music – improved profits from the previous year.
American shares of Sony Corporation (TYO:6758) (NYSE:SNE) were down 11.07% to $17.27 at 9:38 AM EDT.