Sony Pictures Entertainment Records $762M Full-Year Profit As Corp Doubles Net Income - Deadline

Sony Corp logged a record $10.7B in net income for fiscal 2020, a 101% increase over the previous year thanks in part to the Games and Networks Services, Music and Film divisions. Still, the company, which unveiled its results in Tokyo on Wednesday, is cautious about the coming year, forecasting a roughly 4% profit loss due to expected decreases in Music and Games among other segments as Covid restrictions loosen up around the world and in-home demand for content eases. This should, however, be partially offset by increases in other areas including Sony Pictures Entertainment.

That division saw its profits for the year ended March 31, 2020 rise 21%, to $762M, despite a 25% decrease in sales to $7.2B. Both are results of the impact of the coronavirus. With movie theaters shut around the world for a large portion of the year, and amid a production slowdown, revenues were affected. Conversely, lower spend on theatrical marketing and higher home entertainment sales put a positive sheen on profits.

Looking ahead, Sony Pictures Entertainment is forecasted to see a 50% increase in sales for fiscal 2021 to 1.14 trillion yen ($10.5B), but just a 3% jump in profits. The small hike is expected in relation to the cost of supporting upcoming theatrical releases, which include Peter Rabbit 2: The Runaway in June (the sequel has already been performing strongly in Australia) and Hotel Transylvania: Transformania in July, followed by Venom: Let There Be Carnage, Ghostbusters: Afterlife and Spider-Man: No Way Home rounding out the year. Sony is also eyeing an increase in sales for TV productions including revenues from the licensing of Seinfeld.

Games and Network Services reported profits of 342.2B yen ($3.14B) up 44% from the previous year. Earnings were boosted by increased game software sales and network services sales, mainly from PlayStationPlus which had 47.6M subscribers at the end of March. However, Sony reported a loss resulting from strategic pricing of PlayStation 5 hardware (which was set at below the manufacturing costs) as well as general administrative costs related to the launch. PS5 rolled out at the end of 2020 and has sold 7.8M units. Sony is eyeing a 9% increase in sales for fiscal 2021, but a slight dip in profits. The company noted that there’s been difficulty in supply being able to meet demand.

The Music segment saw strong hikes with sales up to 940B yen ($8.6B), an 11% year-on-year increase. This is where the impact of runaway smash Demon Slayer – Kimetsu No Yaiba – The Movie: Mugen Train is felt as anime business sales fall under the Music umbrella and Sony’s Japan-based subsidiary Aniplex co-produced the pic whose global gross was an estimated $457M through Sunday. Operating income in the segment grew to $1.7B. The forecast here is for slightly higher sales in 2021 with a dip in profits.

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April 28, 2021 at 02:44PM
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Sony Pictures Entertainment Records $762M Full-Year Profit As Corp Doubles Net Income - Deadline
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