The spread and impact of the new coronavirus in China threats all of its forecasts and results, warned the Japanese electronics and entertainment company Sony Corp. warned on Tuesday. This warning was issued by the company while the company also reported a decline in its earnings in the company’s fiscal third quarter primarily because of lower revenues from its video game, networking and film businesses units.
The impact of the virus was unclear, said the Tokyo-based Sony, which is the manufacturer of the PlayStation video-game consoles, Bravia TVs and Spider-Man films. The copany however confirmed that there was threat to the production and sales of its image sensor division. Any new forecast on the situation and the calculated impact of the coronavirus outbreak will be published by the company as soon as possible.
More than 400 people have died in China because of the new coronavirus while more than 20,000 confirmed cases of infection in humans have been reported from the country since the outbreak took place in December.
The company reported a profit of 229.5 billion yen ($2.1 billion) for the October-December quarter which was lower than the 429 billion yen the company reported in the same period a year ago. Despite this, sale revenue grew by 3 per cent to 2.46 trillion yen ($22.6 billion). The quarterly profit and sales beat estimates by FactSet.
For the entire year ending March 2020, the profit forecast of Sony was announced at 590 billion yen ($5.4 billion) which was more than an earlier forecast made by the company for the same period at 540 billion yen ($5 billion).
However even that was lower than the profits of 916 billion yen that Sony earned in its last fiscal year ended March 2019.
There has been a decline in sales and profit from Sony’s PlayStation 4 business. The company is set to commercially launch later this year its PlayStation 5. However analysts say that the sale of a current model gets affected if a company announces an upgrade for a machine that has been on sale several years.
There was however good demand for the image sensors of the company which are used in a wide variety of smartphones and digital cameras. The company said that there was a drop in the sale of its electronics products including smartphones and TVs.
Sony said that its earnings were also affected by an unfavorable exchange rate.
According to the company, there was a year on year drop in revenues of partly because of the strong performance the previous year of “Venom” a film about the Marvel comics superhero, according to Sony.
Higher expenses during the quarter also offset the gains made by the company from increased sales from TV shows, including licensing revenue from the series “The Crown”.
The company also gained from publishing sales from the acquisition of EMI as well as streaming in revenues for its music operations.
(Adapted from NYTimes.com)