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Sony smartphones struggle as sensors and PS4 software soar

Sony smartphones struggle as sensors and PS4 software soar

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Sony made ¥33.6 billion ($280 million) in net profit off ¥1.89 trillion ($15.8 billion) in revenue in the second quarter of fiscal 2015, with an operating profit of ¥88 billion ($733 million). This is a marked improvement over the same period a year ago, when the company made a heavy loss after writing down the value of its smartphone business, but revenue is actually down by a fraction of a percent. Sony's forecast for the year remains an operating profit of ¥320 billion off ¥7.9 trillion in revenue.

As has become the norm, one of the most encouraging parts of Sony's earnings report is the Devices section, which includes the company's dominant image sensor business. Operating profit was ¥32.7 billion ($272 million), up 16 percent on a year ago, with sales of ¥258 billion ($2.2 billion). Sony recently announced plans to spin the business off into its own corporation, and said yesterday that it's in talks to take over Toshiba's sensor division. The related but separate Imaging Products unit also performed well, with a 4.1 percent increase in sales boosting operating profit to ¥25.9 billion ($215 million) as Sony hails a shift to more premium digital cameras amid an overall market contraction.

Sony's gaming unit is perhaps the most improved

And Sony's gaming division is perhaps the most improved, with a 16.5 percent increase in sales resulting in an operating profit of ¥23.9 billion ($199 million). While the sensor and camera businesses got a big helping hand from the dollar strengthening against the yen, much more of Sony's gaming operations are located in the US, meaning the exchange rates are less favorable to that part of the corporation — Sony cites a negative impact of ¥13.1 billion. Despite this, PS4 software sales helped boost the games unit to ¥360.7 billion ($3 billion) in revenue.

Sony's Mobile Communications division, on the other hand, is its only tech unit to make a loss at present due to the continued poor performance of the company's Xperia smartphones and tablets. The operating loss was ¥20.6 billion ($172 million) off revenue of ¥279.2 billion ($2.33 billion), showing that the smartphone business continues to suck money out of Sony even a year after ¥176 billion of its value was written off. Sales are down 15.2 percent year-on-year, which Sony says was the main reason that revenue was flat across the company, and explains as a "strategic decision not to pursue scale in order to improve profitability."