Sony Q1 2016 Results

[Shortbread]

Sony, per GAF 1st Course, dracula_x and loudninja

Sony Q1 2016: 3.5M PS4, Game division posts 44 billion yen operating profit
* 3.5 million PS4 sold in Q1 2016. This is compared to 3.0M in Q1 2015.
* Game division posted 44 billion yen operating profit.
* Company as whole posted 21 billion yen net proft.
* Sony is selling battery business https://next.ft.com/content/b1b00940...d-2fc0c26b3c60

Link: http://www.sony.net/SonyInfo/IR/library/fr/16q1_sonypre.pdf
Link: http://www.sony.net/SonyInfo/IR/library/fr/16q1_sony.pdf

Consolidated Financial Results
for the First Quarter Ended June 30, 2016

Financial Services
Operating income – 48.5 billion yen (471 million U.S. dollars)

Game & Network Services (G&NS)
Operating income – 44.0 billion yen (427 million U.S. dollars)

Home Entertainment & Sound (HE&S)
Operating income – 20.2 billion yen (197 million U.S. dollars)

Music
Operating income – 15.9 billion yen (155 million U.S. dollars)

Imaging Products & Solutions (IP&S)
Operating income – 7.5 billion yen (73 million U.S. dollars)

Mobile Communications (MC)
Operating income – 0.4 billion yen (4 million U.S. dollars)

Components
Operating loss – (4.7)

Pictures
Operating loss – (10.6)

Semiconductors
Operating income (loss) – (43.5)

Sony Corp. posted a surprise quarterly profit as strength in its PlayStation division outweighed a slowdown in sales of image sensors.

The company reported net income of 21.2 billion yen ($205 million) in the quarter through June, compared with the average analysts’ expectation for a 39 billion-yen loss. The firm maintained its forecast for annual profit of 80 billion yen.

The strength in games is helping investors look past impact from the Kumamoto earthquakes, which shut the primary manufacturing site for image sensors that power digital cameras. Their focus is shifting to how the company manages a global slowdown in smartphone sales that is hitting component sales, and whether it can sustain user growth at its games division before launching a virtual reality platform and upgraded PlayStation consoles.

“Nothing short of fantastic, especially given that the market has been expecting a loss,” Amir Anvarzadeh, Singapore-based head of Japanese equity sales at BGC Partners Inc., said in an e-mail. “The big takeaway was the games business. Profit there more than doubled and that’s even before PlayStation VR launch in October, which will be a huge shot in the arm for hardware sales.”

Estimates for operating losses from the earthquakes were lowered to 80 billion yen for this fiscal year, from 115 billion yen.

http://www.bloomberg.com/news/articl...h-sagging-sens

 

[eastmen]

good news for them. I wonder if they will sell of the imaging business. I believe they expect sales from it to drop further

 

[Deleted member 11852]

good news for them. I wonder if they will sell of the imaging business. I believe they expect sales from it to drop further

Why do you believe this? The sensor market is growing as more and more devices include decent quality sensors. Sony has dipped because iPhone has dipped. New iPhone new quarter.

 

[Globalisateur]

PS4 hardware cost reductions

We know what it means. Shameful profits (particularly in EU I might say) for each PS4 sold... because they can. They said they like the way Apple announce at the last time their new hardware...But I think they mostly like the way Apple make generous amount of money from their hardware.

 

[Deleted member 13524]

They said they like the way Apple announce at the last time their new hardware...But I think they mostly like the way Apple make generous amount of money from their hardware.

IIRC, that statement was made as a criticism regarding microsoft's announcement of Scorpio over 1 year before release. Which in turn suggests they will start selling the Neo immediately after its unveil.

Though what company doesn't like to make generous amounts of money from whatever they sell?

 

[DieH@rd]

good news for them. I wonder if they will sell of the imaging business. I believe they expect sales from it to drop further

Their primary image sensor factories were damaged in recent earthquake, Sony invested a lot to fix them in these last few months. They will now work overtime to catch up with demand and build stock. Sony also invested a lot into expansion of image sensor production, they are not leaving that part of the business anytime soon.

 

[Shortbread]

good news for them. I wonder if they will sell of the imaging business. I believe they expect sales from it to drop further

Why? There is cost (repairs / loss of revenue) associated when recovering from natural disasters.

 

[zed]

Shipped ~3x as many PS4 as MS shipped xboxones

 

[eastmen]

Why do you believe this? The sensor market is growing as more and more devices include decent quality sensors. Sony has dipped because iPhone has dipped. New iPhone new quarter.

because they are expecting it to drop again in the july forcast by 21.1% ? that's on page 10 so I could be reading it wrong but I don't think I am

 

[Silent_Buddha]

because they are expecting it to drop again in the july forcast by 21.1% ? that's on page 10 so I could be reading it wrong but I don't think I am

I haven't looked through the actual financial report yet, but as long as that business sector remains profitable for them it isn't going anywhere. Volume/revenue drops are concerning but as long as there's a profit, that's what ultimately matters. And depending on how much a corporation values a business segment they may or may not be willing to endure multiple quarters of loss (PS3 was a great example of that as well as their TV division for quite a few years) if they believe they can turn things around.

Regards,
SB

 

[eastmen]

I haven't looked through the actual financial report yet, but as long as that business sector remains profitable for them it isn't going anywhere. Volume/revenue drops are concerning but as long as there's a profit, that's what ultimately matters. And depending on how much a corporation values a business segment they may or may not be willing to endure multiple quarters of loss (PS3 was a great example of that as well as their TV division for quite a few years) if they believe they can turn things around.

Regards,
SB

Right , they contribute the drop in point and clicks and other cameras however cell phones may be maxed out or close to it in the world wide market so there might not be growth there at all and if the point and click and dslrs continue to drop they may just sell it.

Thats why I was wondering. They've sold off a lot of the business that isn't growing

 

[Deleted member 11852]

because they are expecting it to drop again in the july forcast by 21.1% ? that's on page 10 so I could be reading it wrong but I don't think I am

The final two columns are the actual performance relative to previous quarter's reports and predictions. So actual performance over this full quarter was 21.1% down on their previous quarter (because of all the problems) but 1.6% better than their prediction for this quarter that they issued back in May.

Sony could actually profit more from the closedown than operating while they are paying for restricting costs out of their own pocket, these costs along with revenue losses from not operating will be covered by insurance.

The narrative explains it:

Imaging Products & Solutions

Sales are expected to be higher than the May forecast due to a shorter-than-expected delay in the supply of components used for Still and Video Cameras resulting from the 2016 Kumamoto Earthquakes, partially offset by the impact of foreign exchange rates. Operating income is expected to be higher than the May forecast mainly due to the above-mentioned increase in sales and an expected improvement in product mix resulting from a shift to high value-added models in Still and Video Cameras, partially offset by the negative impact of foreign exchange rates.​

 

[Rangers]

These are one of those head scratcher of PS4 shipped numbers for Sony...because USA and Japan sales are pretty weak and for that matter every indication we have is the UK market is too. In NPD they sold 175k PS4 April 207k May 234k June. Total 616k. That's down from last years 691K over the same period in USA. And yet last year they shipped 3.0 million PS4's in this quarter, 500,000 fewer. I often use the 3:1 World:USA ratio for Sony, well, this is more like 6:1! Granted individual quarters can vary wildly from that overarching ratio.

Checking Japan sales, I dont have an exact number but as of July 24 PS4 was at 739k YTD by Media Create. Probably can estimate then maybe 300k from April to June (sales should been a little heavier around the first of the year given Japan holidays). That puts them close to a million between Japan and USA.

My guess is it's stock fiddling. They must have been short from prior Q's. Or even preparing for a fall price drop maybe?

Regardless this is their best PS4 shipped Q1 yet, which puts them on pace to surpass last FY's 17.7m PS4's shipped. PS4 total stands at 43.5 million shipped as of the end of June.

Given just some conservative estimate of 3/8/3 the rest of the FY, they'll be closing on 60 million by March of 2017. Of course, I'm not sure how Neo factors in to all this. Will it cause PS4 regular too fall off? Do we count Neo as just a different model of PS4?

 

[Rangers]

Shipped ~3x as many PS4 as MS shipped xboxones

MS doesn't give out that number

But yeah I have XBO at 486k for Apr--Jun NPD, so using the 2:1, MS probably shipped ~a million or just under.

 

[Shifty Geezer]

Do we count Neo as just a different model of PS4?

Yes. Total install base for software developers is PS4+Neo install base.

 

[Deleted member 11852]

These are one of those head scratcher of PS4 shipped numbers for Sony...because USA and Japan sales are pretty weak and for that matter every indication we have is the UK market is too.

I don't follow this. Sales are weak compared to what? Not the competition In population terms the US is a chunk smaller than half of Europe. Europe is a Sony stronghold and Microsoft relegated many European countries to tier 2 launch zones so they lost traction off the bat. Now throw in the rest of Asia (Japan is tiny), South America, Africa (which isn't all starvation, plains, gazelles and lions) and the Middle East and there you have it.

When you look at XBO sales vs. PS4 in North America you're seeing the sales contrast in the best possible light for Microsoft, i.e. they have the least relative sales deficit there.

 

[Silent_Buddha]

I don't follow this. Sales are weak compared to what? Not the competition In population terms the US is a chunk smaller than half of Europe.

In market terms, it's roughly the same (Europe to NA, not XBO to PS4), however. At least with regards to consoles. For a while Europe was doing slightly better than the US, but in the past year the US has regained the lead in terms of software units sold for many publishers. But in general it's basically 50:50 between NA and Europe with slight variations. If hardware sales don't mirror that, then I can only imagine software attach rates in Europe are pretty bad.

Regards,
SB

 

[Rangers]

The 3:1 ratio for Sony is still almost perfect. 43.5 million shipped, and 13.99 million sold in USA through June. 14X3=42. So it's a tad higher than 3:1, but very close. For that matter IIRC sometimes PS3 was at 3.2:1, etc.

 

[Deleted member 11852]

In market terms, it's roughly the same (Europe to NA, not XBO to PS4), however. At least with regards to consoles. For a while Europe was doing slightly better than the US, but in the past year the US has regained the lead in terms of software units sold for many publishers. But in general it's basically 50:50 between NA and Europe with slight variations.

The published European sales figures are basically worthless, not only is the region wider than the countries that comprise it, very few systems exist for consistently collecting data and those that do are woefully incomplete even compared to NPD. Stats people aggregate and interpolate and hope for the best but the figures are as useless as averages. Most original data sources aren't even using units sold but revenue and trying to work out what this is.

You have to remember you're often relying on the same type of analysts who didn't know Nintendo weren't going to be super rich from Pokemon Go. The type of people who don't check basic facts.

 

[Silent_Buddha]

The published European sales figures are basically worthless, not only is the region wider than the countries that comprise it, very few systems exist for consistently collecting data and those that do are woefully incomplete even compared to NPD. Stats people aggregate and interpolate and hope for the best but the figures are as useless as averages. Most original data sources aren't even using units sold but revenue and trying to work out what this is.

You have to remember you're often relying on the same type of analysts who didn't know Nintendo weren't going to be super rich from Pokemon Go. The type of people who don't check basic facts.

I don't use NPD or GFK data for that. It's data released by the publishers themselves in their quarterly and yearly financial reports. So I'd assume they know at least with some degree of accuracy how well their software is selling in each region.

They'll generally have EMEA and NA breakdowns. So in this case I'm also including Middle East and Africa numbers with Europe and then comparing to NA. And even then, it's roughly 50/50 between EMEA and NA with some variations (some publishers are generally higher in EMEA while some are generally higher in NA).

Regards,
SB