Just before CEO Kaz Hirai took control of the company at large, Sony reported an unprecedented fiscal hit. In May 2012, Sony reported an annual loss of $5.7 billion after being plagued by low television sales and losses incurred after the 2011 tsunami in Japan. It was expecting things to be one the up and up though, predicting an annual profit of $375 million for the fiscal year ending in March 2013. Despite some fluctuations in that profit forecast since, Sony now expects to actually do better than expected.
Sony announced on Thursday morning in a note to investors that it had revised its profit forecast up. Where it was expecting approximately $201 million at of the end of last quarter, it’s now expecting profits of $401 million. Operating income is also expected to be up to, coming in around $2.3 billion rather than the $1.3 billion it was expecting.
Sony attributes the boost in profits to the fluctuation of the Japanese yen over the past few months, as well as the surprise success of Sony Financial Holdings, which performed better in February than it expected. The extra billion in operating income, meanwhile, comes from a few sources, primarily Sony’s massive sale of assets including its corporate headquarters properties in both New York City and Tokyo.
While Sony’s recovering – a comfort to investors if not its employees that have been laid off in the past year – we’ll have to wait until the company reports its full earnings on May 9 to determine if the PlayStation division has recovered. Diminishing PS3 sales and disappointing PS Vita sales have seen the company’s gaming business drag on the rest of the company’s recovery in the past year.
It’s a difficult time for the PlayStation brand. Despite the positive press in the wake of the PS4’s February reveal, the company is still incurring substantial costs in the PlayStation division that it may not see a return on in the immediate future. Producing the PS4 hardware, games to support it, and the massive online infrastructure needed for its various entertainments is going to be expensive for Sony this year, and profitability from the new PlayStation line – like most consoles in their early days until costs of manufacture lower – is not likely out the gate.
