With no “Spider-Man” sequels on hand and its early summer releases a bust, Sony Pictures relied on homevideo and a first taste of coin from MGM to keep its perf about even with last year.
On the whole, though, the first earnings report for new Sony topper Howard Stringer, who took the reins in June, was a disappointing one. Conglom’s revenue for the quarter was down 3% from a year earlier at $14.2 billion, while net income fell from a profit last year to a $66 million loss.
Combined with a sharp reduction in guidance, Sony disappointed investors and saw its stock fall 5% Thursday on the news.
Motion picture division revenue fell 2.6% to $1.3 billion, with decline blamed on what the company called “weaker-than-expected U.S. theatrical performances” for “XXX: State of the Union,” “Lords of Dogtown” and “Bewitched.” Sony’s last three big releases grossed a combined $97.2 million domestic.
Operating income for Sony Pictures rose, however, up 4% from the same quarter a year ago to $39 million. Winter hits “Hitch,” “Are We There Yet?” and “Boogeyman” were largely responsible, with all three doing well in homevideo.
Sony Pictures also got a boost as sales of MGM titles were included in its results for the first time. Acquisition of MGM, for which Sony handles theatrical and homevideo distribution, closed April 8; Sony owns a 20% stake.
Current quarter is expected to be a tough one for the film unit as pics such as “Stealth” and “Deuce Bigalow: European Gigolo” will be measured against “Spider-Man 2,” which grossed $374 million following its June 30 release last year.
Sony’s PlayStation vidgame division saw a big boost thanks largely to its new PSP handheld device, which launched in June, as well as strong game sales. Company shipped 2.1 million PSPs worldwide last quarter and 3.5 million units of its PlayStation 2, which will be replaced by the PlayStation 3 next year.
Sony BMG music, in which the conglom has a 50% stake, reported a small loss of $18 million on revenue of just over $1 billion.
Joint venture recently agreed to a $10 million fine as part of New York Attorney General Elliot Spitzer’s investigation into radio station payola.
Most disappointing to investors, Sony lowered its predicted revenue for the fiscal year ending March 31 by 3% and its net income guidance by 88%. Company blamed that primarily on falling sales for televisions as well as higher restructuring charges as Stringer continues to revamp the company.
New topper is expected to reveal his plan for reshaping Sony in September. Stringer has already made clear that increasing synergy among the largely independent Sony divisions will be a top priority.
Topper has begun that effort by bringing together disparate tech execs to create a unit devoted to digital media, where it’s been trounced by Apple’s iPod and iTunes and hasn’t yet developed a video strategy.
Shares in Sony closed down $1.70 at $32.45 Thursday.