Sony Pictures Profits Slide in Quarter as Group Earnings Climb

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Japanese electronics and entertainment group Sony saw its sales and profitability climb in the three months to end of September, the second quarter of its financial year.

Earnings came in at JPY212 or $1.36 per share, handily beating financial analysts’ consensus EPS estimates of $1.03. Group revenue for the quarter was reported at JPY2.751 trillion ($18.6 billion), also ahead of analysts’ forecasts of $17.95 billion.

Profits in the headline ‘Pictures Division’ weighed in at $202 million, down both on a year-on-year basis and on a quarter-on-quarter basis.

Currency movements were always certain to be a big factor in these results. The Japanese Yen has recently tumbled to 30-years lows as central bank, the Bank of Japan, pursues an ultra-loose monetary policy that runs directly contrary to the cycle of monetary tightening and interest rate increases being operated by the U.S.’s Federal Reserve.

When Sony reported its second quarter results at this time last year one US dollar bought 114 Japanese Yen ($1=JPY114). Now the rate is $1=JPY148. And for that results presentation Sony used a quarterly average rate of $1=JPY110.

The weakening of the Yen against the dollar increases the value of Sony’s overseas earnings when expressed in the Japanese currency. But it increases the cost of raw materials and components that have to be imported from outside Japan.

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