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Sony’s Q1 profits fall 75% on strong yen, weak smartphone sales

TOKYO — Sony Corp’s fiscal first-quarter profit dipped 74 per cent to ¥21.2 billion (S$274 million), as earnings were hammered by a strong yen, lagging smartphone sales, and a quake in south-western Japan that disrupted its camera parts and semiconductor production.

Sony Q1 profits fell 74 per cent on weak smartphone sales, a strong yen, and the earthquake in south-western Japan that disrupted production. Photo: AP

Sony Q1 profits fell 74 per cent on weak smartphone sales, a strong yen, and the earthquake in south-western Japan that disrupted production. Photo: AP

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TOKYO — Sony Corp’s fiscal first-quarter profit dipped 74 per cent to ¥21.2 billion (S$274 million), as earnings were hammered by a strong yen, lagging smartphone sales, and a quake in south-western Japan that disrupted its camera parts and semiconductor production.

The Japanese electronics and entertainment giant reported on Friday (July 29) that April-June sales slipped nearly 11 per cent year-on-year to ¥1.6 trillion.

Quarterly profit last year totaled ¥82.4 billion.

Tokyo-based Sony, the maker of Bravia TVs and Walkman portable players, said game software sales for the PlayStation 4 video game console performed well.

Results were hurt by the earthquake in April that devastated parts of Kumamoto, on the southern island of Kyushu that slowed development and manufacturing of camera parts, resulting in repair costs, damages and other expenses, it said.

Sony has been pursuing a turnaround in recent years, and selling some assets, such as its Vaio personal computer business.

This week, it agreed to sell its battery business to Japanese electronic components maker Murata Manufacturing Co. It hopes to complete a deal by October and do the transfer by March next year.

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

Its movie division benefited from the popularity of The Angry Birds Movie, Sony said. Among its music best-sellers was Beyonce’s Lemonade, it said.

Sony kept its profit forecast for the full fiscal year unchanged at ¥80 billion, a fraction of the ¥148 billion earned in the fiscal year that ended in March.

It lowered its annual sales forecast to ¥7.4 trillion from an earlier ¥7.8 trillion.

An unfavourable exchange rate was another minus for Sony. Sony said the dollar dipped from ¥121 in the same quarter the previous year to about ¥108 for the period through June. A strong yen hurts earnings of Japanese exporters when translated into yen. AP

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