Sony Corp. 2Q net profit plunges 86 pct as strong yen stings

Markets Associated Press

Sony Corp.'s net profit plunged 86 percent in the last quarter from a year earlier, the company said Tuesday, as its profitability was hammered by a strong yen and lagging smartphone sales.

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The Japanese electronics and entertainment giant reported a 4.8 billion yen ($45.8 million) net profit in July-September. Net profit was 33.6 billion yen in the same period a year earlier.

Sales dropped nearly 11 percent to 1.69 trillion yen ($16.1 billion) in the last quarter, down from 1.89 trillion yen a year earlier, the company said in a statement.

A strong yen hurts earnings of Japanese exporters when translated into yen. In the April-September six-month period, Sony's net profit tumbled 78 percent.

On Monday, Sony announced it expects a larger loss than earlier anticipated in connection with the 17.5 billion yen ($167 million) sale of its battery business to the Murata Group.

Sony said it would book a net loss of 37.5 billion yen ($358 million) in its profit for the full fiscal year that ends March 31. It slashed its forecast for full-year net profit to 60 billion yen ($573 million) from an earlier estimate of 80 billion yen. Sony recorded a net profit of 147.8 billion yen in the last fiscal year.

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Tokyo-based Sony, the maker of Bravia TVs and Walkman portable players, left its forecast for sales at 7.4 trillion yen ($70.6 billion), unchanged from its earlier outlook and down from 8.1 trillion yen a year earlier.

As part of its turnaround strategy, Sony has been selling some assets, including its Vaio personal computer unit.

The plan to sell the battery business run by Sony Energy Devices Corp. to Murata involves transferring all of Sony's battery-related manufacturing based in China and Singapore and sales and R&D assets and staff working assigned to its battery business in Japan.

Earthquakes in April that disrupted production of camera parts and semiconductors in southern Japan's Kyushu also were a factor in the lower profits for the half-year, costing the company a total of nearly 48 billion yen ($458 million), Sony said.

Sony's TV division has lost money for years, and its smartphone offerings have suffered amid intense competition from Apple Inc.'s iPhone and Samsung Electronics Co.'s Galaxy line.

However, the company said sales of software for the PlayStation 4 video game console performed well.

The movie division got a lift from "Ghostbusters," ''Sausage Party" and "Don't Breathe," Sony said. Fate/Grand Order, a game application for mobile devices and an increase in digital streaming revenue helped its music business.