A weak yen, massive write-down and slow holiday season at the box office put a wrench in Sony’s third quarter, as the Japanese conglomerate reported significant declines in revenue and profit Thursday afternoon in Tokyo.
Sony reported revenue of $20.6 billion and earnings of 13 cents a share for the three months ended Dec. 31, which is the company’s fiscal third quarter. Revenue was down 7 percent compared with the corresponding period last year, while earnings were down 84 percent in yen terms. Analysts expected $22.4 billion in revenue and earnings of 38 cents a share.
Sony’s week began when it announced it would be taking a $962 million write-down tied to its motion picture division based on reduced expectations for the home entertainment division, an accounting move that may make it easier to attract an investor or even buyer for the struggling studio. That accounted for the bulk of the company’s substantial dip in profit,
Sony Entertainment CEO Michael Lynton announced earlier this month that he is stepping down to focus on his role as chairman of Snapchat parent Snap Inc., which is preparing for an IPO. Lynton’s exit comes on the heels of several other high-level executive departures, including TV chairman Steve Mosko and Sony Pictures co-chair Amy Pascal, who left shortly after the studio was hacked in late 2014.
The studio has had some success with TV, such as Golden Globe winning Netflix series “The Crown,” but Sony placed just fifth among all major studios last year with 8 percent market share — its lowest this millennium. And while Sony Pictures had a holiday blockbuster in 2015 with “Spectre,” the studio did not have a repeat performer this year. But the $962 million goodwill impairment charge was the main reason Sony’s studio plunged to a $920 million loss.
Sony’s semiconductor business was a bright spot, growing its revenue 17 percent and operating income 28 percent year-over-year. But foreign exchange rates hurt many of its other business segments, including home entertainment, which dipped 12 percent in revenue and 17 percent in profits year-over-year.