Conglom sees setbacks in electronics, games divisions
NEW YORK — This time last year, Sony Pictures was setting records and spinning gold from “Spider-Man.” Now it’s wading in red ink, trying to forget “Gigli.”
Parent Sony Corp., which reported quarterly results Thursday, said the studio swung to a $42 million loss, due mostly to a hefty but unspecified writedown for the clamorous dud starring Jennifer Lopez and Ben Affleck. Revenue for the three months ended Sept. 30 crept up 1% to $1.7 billion.
The loss contributed to a 25% plunge in Sony’s total net profit, which fell to $297 million. Revenue was basically flat — up 0.4% — at $16.2 billion for the three months ended Sept. 30. That was Sony’s second quarter as the company’s fiscal year ends in March.
Sony shares dropped more than 7% in New York to close at $34.51. The troubled Japanese conglom has suffered some setbacks in its giant electronics and games divisions, and it is expected to announce next week a massive restructuring, including thousands of job cuts worldwide. The overhaul includes the loss of 300-500 jobs at Sony Pictures Entertainment.
Sony said “Gigli” couldn’t offset gains from theatrical releases “Bad Boys 2” and “S.W.A.T.,” homevid releases “Anger Management” and “Daddy Day Care” and initial syndication sales of ‘The King of Queens.”
Losses from “Gigli” in no way compare to the windfall from Spidey, and the studio would have had a near impossible time matching its year-earlier numbers under any circumstances. Overall, Sony anticipates a solid year with a holiday sked including “The Missing,” “Big Fish,” “Something’s Gotta Give” and Julia Roberts starrer “Mona Lisa Smile.”
Sony Music swung to a profit of $2.7 million in the quarter from a year-earlier loss on restructuring and cost cutting. But revenue dipped 9% to $1.2 billion as album sales continued to decline. Company cited piracy and lack of hit releases, in that order.
At Sony’s game unit, rising research and development costs, mostly in computer chips, sent operating income plunging 91% to $20 million. Revenue fell 36% to $1.5 billion on lower U.S. sales of the PlayStation 2 console and a decline in game software sales.
Operating profit in electronics, Sony’s biggest unit, jumped 36% to $327 million. Revenue was off 1.4% to $11 billion. Sales of camera-equipped cell phones and digital cameras were strong, but prices fell.
Sony left unchanged its net income and sales forecast for the fiscal year ending March 31. It expects profits to fall 57% to $457 million on $68 billion in revenue, off 1% from last year.