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Sony's 9-month profit up 63% on games, music

Tokyo

JAPANESE electronics giant Sony said on Friday that nine-month net profit jumped 63.2 per cent year on year, led by its games and music divisions, while tax benefits allowed the firm to raise its annual forecast.

But the electronics and entertainment giant lowered its annual sales forecast, citing slower than expected sales in a range of fields including the key semiconductor unit.

The company said its April-December net profit reached 828.4 billion yen (S$10.3 billion), while operating profit rose 13.9 per cent to 811.5 billion yen. However, revenue dipped 0.8 per cent to 6.54 trillion yen.

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While the company said it expected sales to fall in a range of fields, it added that many of its key segments should meet forecasts, including its games, music, movie, television and audio operations.

Before the announcement, analysts said the company was expected to continue seeing improvement after years of painful losses.

"Sony remains on a recovery track," Hideki Yasuda, an analyst at Ace Research Institute in Tokyo, said ahead of the announcement. "Its game sector has continued spearheading its recovery although sales of PS4 consoles are gradually slowing down."

Sony's movie segment also drove profits, said Yasuo Imanaka, an analyst at Rakuten Securities. "Its recent box-office movies are now generating profit through sales of DVD and Blu-ray discs as well as profits from their television licence fees," he said ahead of the announcement.

In the three months to December, including the all-important holiday shopping season, Sony said it continued to enjoy robust game software sales, although sales of PS4 consoles slowed.

EMI Music Publishing, now a Sony subsidiary, also contributed to profits, while the movie Venom added to the group's sales.

Sony said it had to downgrade its overall annual sales target to 8.5 trillion yen from an earlier projection of 8.7 trillion yen owing to lower than expected sales of financial services, semiconductors, mobile gadgets and cameras. But a one-off tax benefit allowed the firm to lift a net profit projection to 835 billion yen from the previous outlook of 705 billion yen.

Sony continued to struggle with its smartphone business, with analysts suggesting the firm should give up the segment in the future, rather than to continue bleeding. AFP