Hacking, earthquake add to costs
The March earthquake and resulting tsunami in Japan, and hacker attacks soon thereafter shook Sony’s bottom line during the April-June quarter, forcing the company to post a $199 million loss.Company trimmed its net profit forecast for the current fiscal year from $1 billion, announced in May, to $769 million; later figure would still mark a return to profitability after three years of consecutive losses. The widely publicized security breaches of Sony’s PlayStation Network game and music services, which started in April, exposed the personal info of nearly 100 million subscribers while dealing a severe blow to its corporate image. As a result, Sony said that repairing the damage, including introducing tighter security, after countless delays, and freebies to lure back disgruntled subscribers, has cost $179 million. Also, disaster-related costs have amounted to $8 million, including fixing tsunami-hit plants and restoring equipment. Meanwhile, Sony has slashed its forecast of sales of Bravia TVs this year from 27 million to 22 million units, citing “matured markets” in Europe and the U.S. as well as the strengthening of the yen against key currencies. The film division recorded a 1.4 billion yen gain in operating profit to 4.3 billion yen ($53 million), while sales grew 9.3% year-on-year to $1.78 million. One highlight came from stronger home entertainment sales of pics that included “The Green Hornet,” “Battle: Los Angeles” and “Just Go With It.” Theatrical revenues, however, dipped compared with the year-earlier quarter; despite the modest success of “Bad Teacher,” the R-rated comedy, combined with “Priest,” “Jumping the Broom” and “Soul Surfer,” couldn’t measure up to last year’s “The Karate Kid” remake. Meanwhile, healthy ads sales from SPE’s Indian TV network boosted profits. Sales at Sony’s music biz fell 0.6% year-on-year to $1.35 billion, with unfavorable exchange rates taking the blame. On a yen basis, sales rose 7% with new releases from Adele, Beyonce, Foo Fighters and the cast of the hit drama series “Glee” making major contributions. Operational profit increased 61% year-on-year to $149 million. (Marc Graser contributed to this report.)
Want Entertainment News First? Sign up for Variety Alerts and Newsletters!