Sony Pictures Entertainment Q1 Profit Dips 6% To $232M; Corp’s Overall Operating Income Jumps 26%

For the three months ended June 30, 2021, Sony Pictures Entertainment posted profits of $232 million, a 6% decrease versus the same period last year on a local currency basis (27 billion yen to 25.4 billion yen). Revenue was up 15% on a U.S. dollar basis to $1.87 billion. Films in release during the quarter included Screen Gems’ The Unholy and animated sequel Peter Rabbit 2: The Runaway. The latter has grossed $151.5 million worldwide thus far ($114 million during the quarter) with Korea and Brazil still to come.

Sony said sales grew for motion pictures while television licensing revenue also increased. There was, however, a decrease in home entertainment sales given scant theatrical releases in 2020. Profits were impacted by the above as well as higher TV production costs.

Films due in the second quarter include Don’t Breathe 2 and Venom: Let There Be Carnage.

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Looking ahead, Sony raised its full-year profit projections for the Pictures division by 8% to 90 billion yen ($825 million) partly due to an increase in licensing revenue. The company noted on an earnings call that while domestic box office has recovered somewhat, it remains uncertain when the situation will return to normal. Given these circumstances, the company is taking a flexible approach to its release strategy, noting the licensing of features Cinderella and Vivo to Amazon and Netflix, respectively.

Overall, Sony Corp operating profit for the quarter ended June 30 rose to 280.1B yen ($2.57 billion) from 221.7 billion yen a year earlier for a 26% increase. Sales were up 15% to 2.26 trillion yen and net income grew 9% to 211.8 billion yen. The company cited significant increases in electronics and music sales with a decrease in profits from games.

The Games division saw sales shift upwards by 2% while operating income dropped 33% based on a decrease in sales of non-first-party titles, a deterioration of operating results for hardware and a loss resulting from strategic price points for PlayStation 5 hardware that were set lower than manufacturing costs, as well as a decrease in unit sales of PlayStation 4 hardware. The full-year forecast remains unchanged from April.

Music got a 56% boost in operating income to 55.4 billion yen ($508 million). That includes higher sales for recorded music and music publishing and an increase in sales in the anime business, primarily reflecting the contribution of physical media revenue from runaway smash Demon Slayer – Kimetsu No Yaiba – The Movie: Mugen Train.

Sony Corp raised its full-year profit forecast to 980 billion yen from 930 billion yen through March 2022.

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