Sony Expects Deeper Loss for Image-Sensor Business
May 24 2016 - 3:40AM
Dow Jones News
TOKYO—Sony Corp. projected Tuesday a deeper loss for its
image-sensor component business this fiscal year due to the effects
of the recent earthquakes that hit its factory in Kumamoto on the
southern Japanese island of Kyushu.
For the current fiscal year ending March 2017, the Japanese
electronics and entertainment group now says its device unit, which
includes image sensors, would incur an operating loss of 40 billion
yen ($367 million), worse than the ¥ 29.2 billion loss for the
fiscal year that just ended. Image sensors are a key element in the
cameras used in many smartphones, including Apple Inc.'s
iPhone.
The company said its device unit's operating profit would be
pulled down by about ¥ 60 billion because of the impact of the
earthquakes. Sony's large device-making factory in Kumamoto was
forced to completely halt operations for several weeks.
Sony said sales of image sensors would increase thanks to
expected orders from smartphone makers. But recent rises in the
yen, the earthquakes, as well as the company's decision to stop
making a camera component that includes the image sensor, will trim
revenue.
The conglomerate as a whole has projected a ¥ 300 billion
operating profit and a ¥ 80 billion net profit on ¥ 7.8 trillion
revenue for the fiscal year.
Sony booked an operating profit of ¥ 294.2 billion in the fiscal
year that ended in March 2016, and aims reach ¥ 500 billion for the
year through March 2018. Morgan Stanley MUFG Securities analyst
Masahiro Ono said Tuesday before the company announced its new
outlook that it "remains on track" to reach that target.
Sony's other pillars include the PlayStation video-game
business, which is projected to make an operating profit of ¥ 135
billion thanks to strong sales of PlayStation 4 consoles and
related network services.
Sony has shipped more than 40 million console units since the
product was introduced in November 2013, and it plans to ship 20
million in the current fiscal year.
Sony's music business is expected to generate a ¥ 63 billion
profit, in part due to growth in the online music streaming
industry.
Sony said its Xperia smartphone business is expected to make a
profit of ¥ 5 billion. The unit has been the group's weakest, but
its chief, Hiroki Totoki, a close aid to Mr. Yoshida, has committed
to turning the unit around this year and keeping it profitable
thereafter.
Write to Takashi Mochizuki at takashi.mochizuki@wsj.com
(END) Dow Jones Newswires
May 24, 2016 03:25 ET (07:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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