Sony's operating profit dropped by 29% in the fiscal second quarter, the company said on Thursday, November 9. The Japanese electronics giant blamed lower sales of image sensors and chips for the decline.
The revenue of 2.8 trillion Japanese yen ($18.5 billion) surpassed London Stock Exchange Group (LSEG) projections of 2.87 trillion yen ($19 billion). That marks an 8% increase year-over-year.
A total of 263 billion yen ($1.7 billion) was earned from operations, compared to the anticipated 304.4 billion yen ($2 billion). This is a decrease of 29% over the previous year.
Sony said the reduction in profits was due to issues in all of its divisions, including the image sensor business, the financial services division, and the divisions dealing with technology, entertainment, and services.
The semiconductor section reported a 28% drop in earnings for the company's second fiscal quarter. Sony manufactures camera processors that are used in consumer electronics from companies like Apple, which utilizes them in its iPhones.
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Optimism Despite Decline in Profits
A logo sits illuminated outside the Sony booth on day 2 of the GSMA Mobile World Congress 2019 on February 26, 2019 in Barcelona, Spain.
Despite a drop in profits, the business predicts full-year revenues of 12.4 trillion yen ($82 billion), up from an earlier prediction of 12.2 trillion yen ($80 billion), thanks to favorable fluctuations in the value of the yen against other currencies.
The Japanese yen has depreciated dramatically compared to the dollar, and Sony generates most of its revenue outside of the United States.
Moreover, Sony said the boost was due in part to the company's confidence in the future success of its video game, music, and image and sensing solutions businesses.
Sony's famous PlayStation system, game studios, and gaming networks all fall under the company's game and network services. The company anticipates better-than-expected revenues for the whole year from these endeavors.
The company's latest PS5 exclusive Marvel's Spider-Man 2 is off to a good start. The game broke the 24-hour sales record for PlayStation Studios, selling over 2.5 million copies in its first day.
According to Sony's earnings report, unit sales of the PS5 increased to 4.9 million in the company's fiscal second quarter, from 3.3 million in the first quarter.
At the most recent earnings conference, Sony stated it is confident in its ability to sell 25 million PS5 consoles by the end of 2023. Analysts and investors have been keeping a careful eye on Sony's PS5 performance, so this could be a noteworthy achievement.
Sony's news follows Nintendo's, which earlier this week announced better-than-expected sales and earnings for its fiscal second quarter, thanks to the success of the Super Mario Bros. Movie and the release of The Legend of Zelda: Tears of the Kingdom game in May.
Sony announced that its new PS5 Slim home console model will retain its expandable storage feature and will initially come with more storage than the base version.
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