TOKYO — Sony Corp. more than doubled its pretax profit in the first quarter, buoyed by a depreciating yen and a stronger film slate.
The company reported an overall 110% gain in pretax profit, to 91.88 billion yen ($805.97 million) in its first fiscal quarter ended June 30, on revenues of 1.43 trillion yen ($12.55 billion), a 22% hike.
Net profit for the quarter was $305.43 million, up 103.7% from fiscal 1996, far exceeding analysts’ forecasts of a 30% to 60% jump.
The first-quarter earnings report pushed Sony shares to an all-time high on the Tokyo Stock Exchange, up 700 yen to 12,500 yen at the close of the morning session 11 a.m. Friday in Tokyo. Sony was the second largest percentage gainer on the Exchange in the morning session, and its shares have increased by almost 50% since February.
In New York, where it trades on the New York Stock Exchange, Sony stock was up $2.38 to close at $101.81, a 52-week high for the share price.
Sales in the entertainment sector rose 24.3% to $2.49 billion, with the motion pictures unit leading the increase, up 41.2% to $1.32 billion. Aside from more successful releases, including “My Best Friend’s Wedding,” “Anaconda” and “The Fifth Element,” as well as “Jerry Maguire’s” homevideo release, earnings were helped by an accounting change in the unit that led Sony to report results covering a four-month period, from March 1 to June 30, vs. a three-month cycle in the year-ago period.
Music group sales climbed by 9.5% to $1.17 billion. Sony said Michael Jackson’s “Blood on the Dance Floor,” Savage Garden’s self-titled album and the “Men in Black” soundtrack were the big products in the music division, while Celine Dion’s 1996 disc “Falling Into You” still rang up big sales in the quarter.
Entertainment operating income, however, dropped 47% to $80.56 million, blamed in part on softness in the music business and comparisons to last year, when Sony Pictures Entertainment inked a lucrative long-term licensing pact with Germany’s Kirch Group.
“The pictures group you’d have to say really stood out, but obviously music should’ve been a bit stronger,” said analyst Harold Vogel of Cowen & Co.
Indeed, any second-quarter forecast for the entertainment business generally, and the motion picture-television division specifically, will be even rosier, since the bulk of B.O. for “Wedding,” “Men In Black” and “Air Force One” — plus anticipated foreign revenues for those three titles, which should be substantial — wasn’t reported until after the June 30 cutoff date for the quarter.
The electronics business posted a 22.2% increase in revenue in the first quarter of 1997 over the 1996 quarter to reach $9.49 billion. Home camcorders, TVs, computer displays, and continuing strong sales of PlayStation game consoles were listed as the top products in terms of the sales boost.
By region, sales in the U.S. were up 36.5% in the quarter to $3.82 billion, while Japan posted a 16.6% jump to reach $3.41 billion and European sales were up 19.1% to $2.86 billion.
The strong first-quarter numbers caused Sony to adjust upwards its earning projections for fiscal 1997. The company upped its net profit projection by 20% to $1.47 billion and its revenue to $54.21 billion, forecasts which some analysts called conservative.