BENGALURU: Sony Corporation (Sony) reported sales of ? 1,901.5 billion (US$ 17,445 million) in Q2-2015, (quarter ended 30 September 2014, current quarter) an increase of 7.2 percent compared to ? 1774.2 billion in Q2-2014. An operating loss of Y 85.6 billion yen (US$ 785 million) was recorded in the current quarter, compared to operating income of 13.9 billion yen in Q2-2014. This significant deterioration was primarily due the ? 176.0 billion yen (US$ 1615 million) impairment of goodwill recorded in the company’s Mobile Communications (MC) segment says the company.

Sony says that increase in sales was primarily due to a significant increase in its games and network services segment (G&NS) sales, reflecting the contribution of the PlayStation 4 (PS4), a significant increase in devices segment sales primarily due to the strong performance of image sensors, as well as the favourable impact of foreign exchange rates. This increase was partially offset by a significant decrease in sales in All Other, primarily related to Sony’s exit from the PC business, explains the company.

Mobile Communications Segment (MC)

Sony’s MC segment’s sales increased 1.2 percent in Q2-2015 to ? 308.4 billion (US$ 2829 million) from ? 304.6 billion, primarily due to the favourable impact of foreign exchange rates, partially offset by a decrease in sales mainly in Japan.

Operating loss of ? 172.0 billion (US$ 1578 million) in Q2-2015 was recorded, compared to operating income of ? 8.8 billion in Q2-2014. As mentioned above, this deterioration was primarily due to the impairment charge of goodwill recorded in this segment. Further, in the current quarter, marketing expenses and research and development expenses increased year-on-year in order to expand sales channels adding to the loss says Sony.

Games & Network Services Segment

G&NS sales increased 83.2 percent in Q2-2015 to ? 309.5 billion (US$ 2839 million) from ? 169 million in Q2-2014. This significant increase was primarily due to the contribution from PS4 hardware sales, a significant increase in network services revenue related to the introduction of the PS4 and the contribution from PS4 software sales, partially offset by a decrease in PlayStation3 (PS3) hardware and PS3 software sales. Sales to external customers increased 97.0 per cent year-on-year.

Operating income of ? 21.8 billion (US$ 200 million) was recorded, compared to an operating loss of ? 4.2 billion in Q2-2014. This improvement was primarily due to the impact of the above-mentioned increase in sales related to the introduction of the PS4, partially offset by the impact of the above-mentioned decrease in PS3 software sales says the company.

Imaging and Print Services (I&PS)

I&PS sales increased 1.8 percent year-on-year to ? 178.6 billion (US$ 1639 million) in Q2-2015 from ? 175.5 billion in Q2-2014. Sales were essentially flat year-on-year primarily due to the favourable impact of foreign exchange rates and an improvement in the product mix of digital cameras reflecting a shift to high value-added models, partially offset by a significant decrease in unit sales of digital cameras.

Operating income of ? 20.1 billion (US$ 184 million) was recorded, compared to an operating loss of ? 2.3 billion in the same quarter of the previous fiscal year. Sony says that this improvement was mainly due to a reduction in selling, general and administrative expenses, the above-mentioned improvement in product mix reflecting a shift to high value-added models and the favourable impact of exchange rates.

Home Entertainment & Sound (HE&S)

HE&S sales increased 7 percent year-on-year to ? 282.4 billion (US$ 2590 million) from ? 263.8 billion in Q2-2014. This increase was primarily due to a significant increase in sales of televisions and the favourable impact of foreign exchange rates. The company says that unit sales of LCD televisions increased significantly in Europe, North America, and Asia-Pacific, partially offset by a significant decrease in unit sales in Latin America. Audio and video  category sales decreased mainly due to a decrease in sales in Latin America reflecting adverse market conditions.

Operating income of ? 8.0 billion (US$ 73 million) was recorded, compared to an operating loss of ? 12.1 billion in the same quarter of the previous fiscal year. This improvement was primarily due to cost reductions and an improvement in the product mix reflecting the shift to high value-added models, partially offset by a decrease in the average selling price of LCD televisions.

Sony reveals that television sales increased 14.7 per cent year-on-year to ? 199.7 billion (US$ 1832 million) in Q2-2015. This significant increase was primarily due to the above-mentioned significant increase in unit sales of LCD televisions, and the favourable impact of foreign exchange rates.

Operating income of ? 4.9 billion (US$ 45 million) was recorded, compared to an operating loss of ? 9.3 billion in Q2-2014. This improvement was primarily due to cost reductions and an improvement in the product mix of LCD televisions reflecting a shift to high value-added models, partially offset by a decrease in the average selling price.

Devices

Devices segment sales increased 23.1 percent in Q2-2015 to ? 247.7 billion (US$ 2273 million) from ? 203.1 billion in Q2-2014. This increase was primarily due to a significant increase in sales of image sensors reflecting higher demand for mobile products, an increase in sales of camera modules, as well as the favourable impact of foreign exchange rates. Sales to external customers increased 25.1 percent in Q2-2015 reveals the company.

Operating income increased ? 17.7 billion to ? 29.6 billion yen (US$ 271 million). This increase was primarily due to the above-mentioned increase in sales of image sensors, the favourable impact of foreign exchange rates and an improvement in the results of the battery business.

Pictures

Pictures segment sales increased 2.4 percent to ? 182.2 billion yen (US$ 1671 million) in Q2-2015 from ? 177.8 billion in Q2-2104 primarily due to the favourable impact of the depreciation of the yen against the US dollar. The decrease on a US dollar basis was primarily due to a decrease in sales for Motion Pictures, reflecting lower theatrical revenues, partially offset by higher home entertainment and television licensing revenues.

Theatrical revenues decreased as the same quarter of the previous fiscal year benefited from a higher number of theatrical releases. Home entertainment and television licensing revenues were higher as the current year benefited from the home entertainment releases of ‘The Amazing Spider-Man 2’ and ‘Heaven is for Real’ and from the television licensing sales of ‘Men In Black 3’ and ‘The Amazing Spider-Man’.

Operating loss decreased ? 16.7 billion y-o-y to ? 1.0 billion (US$ 10 million), as Q2-2014 included higher marketing expenses as a result of a higher number of theatrical releases as well as the underperformance of ‘White House Down’.

Music

Music segment sales increased 1.5 percent in Q2-2015 to ? 116.8 billion (US$ 1071 million) from ? 115 billion. The decrease in sales on a constant currency basis is primarily due to lower music publishing and recorded music sales, partially offset by higher visual media and platform sales. On a constant currency basis, sales of music publishing decreased primarily due to a decrease in revenue outside of the US recorded music sales decreased slightly as the worldwide decline in physical and digital download sales were partially offset by higher digital streaming revenues. Visual media and platform sales increased mainly due to higher sales of animation products. Best-selling titles included Barbra Streisand’s ‘Partners’, Chris Brown’s ‘X’ and Sia’s ‘1000 Forms of Fear’.

Operating income increased ?2.1 billion in Q2-2015 to ? 11.8 billion (US$ 108 million). This increase was primarily due to an improvement in equity in net income (loss) from EMI Music Publishing and a reduction in selling, general and administrative expenses.

Financial services

Financial services revenue increased 10.6 percent in Q2-2015 to ? 269.6 billion (US$ 2473 million) from ? 243.7 billion primarily due to an increase in revenue at Sony Life. Revenue at Sony Life increased 12.1 percent in the current quarter to ? 242.5 billion (US$ 2225 million), mainly due to an improvement in investment performance in the separate account resulting from a larger rise in the Japanese stock market compared to the same quarter of the previous fiscal year, as well as an increase in insurance premium revenue reflecting an increase in policy amount in force.

Operating income increased ? 9.3 billion to ? 47.7 billion (US$ 437 million). This increase was mainly due to an increase in operating income at Sony Life. Operating income at Sony Life increased ? 9.3 billion y-o-y to ? 45.7 billion (US$ 419 million) primarily due to an improvement in investment performance in the general account.

All Other

All Other segment sales decreased 48.8 percent in Q2-2015 to ? 108.6 billion yen (US$ 997 million) from ? 212 billion in Q2-2014. This decrease was primarily due to a significant decrease year-on-year in unit sales of PCs reflecting Sony’s exit from the PC business.

Operating loss increased ? 15.7 billion year-on-year to ? 18.2 billion (US$ 165 million). This deterioration was primarily due to a gain of ? 12.8 billion from the sale of certain shares of M3 recorded in the same quarter of the previous fiscal year and the recording of PC exit costs in the current quarter.