Quarterly profit for Sony Pictures drops to $179 million, and group CFO is elevated to president
Hiroki Totoki will take over as group president from Kenichiro Yoshida, who will remain as CEO and chairman.
The lack of major theatrical successes and lower revenue from television licensing caused Sony Pictures‘ operational income for its fiscal third quarter ending in December to decline to $179 million, down 86% from $1.31 billion in the same period the previous year.
With $96 million, Lyle, Lyle, Crocodile was the Sony division’s top earner, followed by Matilda the Musical, based on a book by Roald Dahl, and Whitney Houston: I Wanna Dance With Somebody, all of which brought in $25 million.
The release of Spider-Man: No Way Home and Venom: Let There Be Carnage, as well as the sale of GSN Games and the licensing agreement for Seinfeld, during the same quarter in 2021 gave the film unit its best-ever performance.
Despite contributions from the purchases of Bad Wolf and Industrial Media, the pictures division’s quarterly sales decreased by 42% to $2.35 billion from $4.06 billion, the company reported in Tokyo on Thursday.
The earnings prediction for Sony Pictures’ whole fiscal year, which ends in March, remained at 115 billion yen ($890 million at the current currency rate).
The poorer performance at Sony Pictures contributed to the group’s operating income decline of 8% to $3.33 billion (428.7 billion yen), which was partially offset by the gaming and image divisions’ outstanding performance. Total sales increased by 13% to $26.52 billion (3.413 trillion yen).
Although it raised costs in some parts of the business, the yen’s decline against the dollar benefited profits across the board. Sony used an exchange rate of 141.7 yen to the dollar for the last quarter, compared to 113.7 for the period in the previous year. The dollar is currently trading in the 128 yen range.
Profit in the gaming division rose 25 percent to $180 million on increased sales of the PlayStation 5 console (shifting 7.1 million units), strong in-house game titles, and the exchange rate. Revenue was up 53 percent, with the weak yen accounting for nearly a third of that.
Foreign exchange rates also boosted the music division, helping it to a 14 percent profit increase to $490 million on revenue of $2.83 billion. Harry Styles, with Harry’s House and Fine Line, and Beyoncé with Renaissance, were its biggest-selling artists.
Hiroki Totoki, CFO for Sony Group, was also named to succeed Kenichiro Yoshida, 63, as group president on Thursday. Yoshida will continue to serve as CEO and chairman. The two have collaborated closely at Sony Bank and Sony Network Communications, and according to Sony, Yoshida requested the new structure, under which Totoki will also serve as COO.
Additionally, Totoki will continue in his position as CFO, which he was given in 2018 when Kaz Hirai was replaced as Sony’s CEO by Yoshida.
“I would like to establish a positive spiral with Mr. Yoshida, the management of the Sony Group, and our employees globally that starts with Sony being picked by customers, which then energizes our staff, allows us to attract more new talent, increases our corporate value, and ultimately enables us to give back to society,” said Totoki of his appointment.
The group has continued its shift away from being centered on consumer electronics with the founding of the Sony Honda Mobility joint venture to develop electric vehicles, as well as ongoing investments in the gaming and music sectors.
Sony shares were flat at 11,470 yen ($89.20) in Tokyo shortly before the earnings announcement.