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Sony said Wednesday that operating profit could fall 30 percent or more in the current fiscal year as the coronavirus hits the box office, as well as consumer demand for smartphones, video-game consoles and other electronics. The Japanese conglomerate, which owns film and TV studio Sony Pictures, sounded alarm bells as it reported results for …
Sony said Wednesday that operating profit could fall 30 percent or more in the current fiscal year as the coronavirus hits the box office, as well as consumer demand for smartphones, video-game consoles and other electronics.
The Japanese conglomerate, which owns film and TV studio Sony Pictures, sounded alarm bells as it reported results for the year ended March 2020 that were largely untouched by the pandemic.
Strong box office performances from “Spider-Man: Far From Home,” “Jumanji: The Next Level” and “Bad Boys for Life” last year, gave Sony Pictures a 28 percent bump in operating profit, to $628 million, while revenue at the film and TV unit climbed 5.1 percent, to $9.32 billion. Overall, the company’s annual profit totaled $5.34 billion on revenue of $75.7 billion.
Sony Pictures’ results did not include the impact of movie theater closures. Theaters in North America and many European markets began to shut down in response to the coronavirus in late March, while cinemas in Sony’s native Japan didn’t close until April.
Sony Chief Financial Officer Hiroki Totoki said he expects to see the impact from the closures moving forward, and he added that the division is finding it difficult to make movies and music, which are central to Sony’s entertainment portfolio. The company also noted that it isn’t sure whether the impact of the virus will change consumers’ desire to go to crowded places like movie theaters, another unknown for the business.
But so far, it is Sony’s electronics unit that is taking the biggest blow, the exec said, adding: “Sales have decreased significantly with retail stores shutting down globally.”
Although the company didn’t issue specific forecasts for the current fiscal year, which runs from April 2020 to March 2021, it said operating profit will likely drop at least 30 percent even under the optimistic scenario that the spread of the virus peaks in the current quarter and business returns to fully normal in the October to December quarter.
