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Sony cuts Full Year Earnings Forecast, shipped 3.9 Million PS4 consoles during the quarter

Another Japanese company lowering guidance largely due to a strengthening Yen.
Asif Khan
Asif Khan
4

Sony Corporation has cut its earnings forecast for the current fiscal year ending in March, 2017. The company now expects to earn a net profit of 60 billion Yen ($572 million) versus a previous expectation of 80 billion Yen. The company attributes most of the decreased earnings guidance to the sale of its battery unit to Murata Manufacturing Co., a deal that Sony expects to close by April. The company took a 32.8 billion Yen impairment charge to operating income during its fiscal second quarter as a result of the sale.

Sony Corporation's Game & Network Services Division experienced an 11.3% drop in Q2 sales and a 20.6% drop in Q2 operating income year over year. This is largely due to the price drop of its market leading PlayStation 4. The console has sold 47 million units and Sony shipped 3.9 million PS4s during the quarter. This drop in revenue was clearly made worse by the Yen strengthening against the Dollar year over year.

The company's Game & Network Services Division still generated a profit of $188 million on revenues of $3.167 billion, but there are too many moving parts at the massive conglomerate for investors to care. The market will likely focus on the 25% lower forecast of Sony Corporation's net profit for the current fiscal year. This is a tough time for Japanese companies as Nintendo also slashed their earnings forecast when they reported results last week.

CEO/EIC/EIEIO
CEO/EIC/EIEIO

Asif Khan is the CEO, EIC, and majority shareholder of Shacknews. He began his career in video game journalism as a freelancer in 2001 for Tendobox.com. Asif is a CPA and was formerly an investment adviser representative. After much success in his own personal investments, he retired from his day job in financial services and is currently focused on new private investments. His favorite PC game of all time is Duke Nukem 3D, and he is an unapologetic fan of most things Nintendo. Asif first frequented the Shack when it was sCary's Shugashack to find all things Quake. When he is not immersed in investments or gaming he is a purveyor of fine electronic music. Asif also has an irrational love of Cleveland sports.

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  • Shacknews legacy 10 years legacy 20 years
    reply
    November 1, 2016 1:50 AM

    Asif Khan posted a new article, Sony cuts Full Year Earnings Forecast, shipped 3.9 Million PS4 consoles during the quarter

    • not5am legacy 10 years
      reply
      November 1, 2016 2:11 AM

      "some"? they're taking a ¥33Billion impairment charge from the sale, that's over the forecasted cut.

    • daggot legacy 10 years legacy 20 years
      reply
      November 1, 2016 7:31 AM

      "but there are too many moving parts at the massive conglomerate for investors to care."

      This right here is both accurate, and what always drives me nuts about public companies (well, investors). There's simply no trust that leadership will do the right thing. And, investors don't take enough interest in their investment to make better informed decisions about the company's decisions or that leadership will do the best thing for the company. At my first job there was WAY too much focus on the short term financial goals at the complete expense of the company's long term success. I know we've heard Amazon is a bit of a hell hole to work about, but I can appreciate Bezos's approach to investing into the long term future at "some" short term expense.

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