updated 07:45 am EDT, Thu August 1, 2013
Sony turns the corner, stems losses as recovery strategy starts to bite
Sony CEO Kaz Hirai's 'One Sony' philosophy driving the company's restructuring and product focus seems to be paying dividends. The Japanese tech giant has reported its fiscal Q1 results (pdf) and has produced a modest, but significant, profit of $35 million against a $312 million loss for the same period last year. The positive result outstripped analyst's expectations and was driven by the traction it gained in the tough smartphone segment, with its Xperia line of smartphones shipping 9.6 million units along with favorable currency exchange rates.
However, while Sony's smartphone sales were a highlight for the company, it struggled to eke out a profit in other key areas of its business including the Imaging and PlayStation gaming division. Sales of its PS3, PS2 and PSP were all down, although games sales were up slightly. Additional costs were booked for research and development expenses for its upcoming PlayStation 4 console, due to ship this holiday season.
A bright note was that its Home Entertainment and Sound division saw sales increases of 9.3 percent overall, with the company's television sales up a marked 18.2 percent. This, according to the company, was due to getting its product mix right in its LCD TV range, while it also managed to cut costs at the same time, boosting its profitability. Similarly, Sony enjoyed an uptick in music and TV series sales, but the success of Will Smith's Men In Black 3, was offset by the failure of Smith's other major release, After Earth.
Looking forward, Sony expects its Imaging division to bounce back to profitability with sales expected improve significantly year-on-year, but it expects that its gaming division will continue to struggle despite increased sales thanks to a high mix of hardware sales coming from the US. Sony is particularly buoyant about its smartphone sales, which it expects will increase significantly over the course of the year.