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.
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.
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replyAsif Khan posted a new article, Sony cuts Full Year Earnings Forecast, shipped 3.9 Million PS4 consoles during the quarter
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Updated. I was more focused on reporting their gaming results, but that is important information. Please understand.
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"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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