Sony Corporation announced its consolidated financial results forecast for the third quarter ended December 31, 2014 (October 1, 2014 to December 31, 2014). Sony has also revised its consolidated forecast for the fiscal year ending March 31, 2015 from the forecast announced on October 31, 2014.
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Sales and operating revenue (Sales) are expected to be 2,557.8 billion yen ($21,139 million), an increase of 6.1% compared to the same quarter of the previous fiscal year (year-on-year).
This increase is primarily due to the favorable impact of foreign exchange rates, a significant increase in Mobile Communications (MC) segment sales reflecting an increase in unit sales of smartphones, a significant increase in Devices segment sales due to the strong performance of image sensors, and a significant increase in Game & Network Services (G&NS) segment sales reflecting the strong performance of PlayStation 4 (PS4).
This increase is expected to be partially offset by a significant decrease in sales in All Other, primarily related to Sony’s exit from the PC business, and a significant decrease in sales in the Pictures segment, mainly due to lower Motion Pictures and Television Productions sales.
On a constant currency basis, sales are expected to decrease by 1% year-on-year. Operating income is expected to increase 89.4 billion yen year-on-year to 178.3 billion yen ($1,474 million).
This significant increase is expected primarily due to a significant improvement in the operating results of the Devices, Home Entertainment & Sound (HE&S), G&NS, and Imaging Products & Solutions (IP&S) segments. This improvement is expected to be partially offset by a significant decrease in operating income in the Pictures segment.
Operating income in the current quarter includes an 11.2 billion yen ($93 million) write-down of PlayStation®Vita (PS Vita) and PlayStation TV (PS TV) components in the G&NS segment.
In the same quarter of the previous fiscal year, a 32.1 billion yen impairment charge related to long-lived assets in the battery business in the Devices segment and a 6.2 billion yen write-off of certain PC software titles in the G&NS segment were recorded. During the current quarter, restructuring charges, net, are expected to decrease 4.6 billion yen year-on-year to 9.0 billion yen ($75 million).
PC exit costs decreased 6.1 billion yen year-on-year to 4.9 billion yen ($41 million) which includes 1.4 billion yen ($11 million) of restructuring charges..
Equity in net income of affiliated companies, recorded within operating income, is expected to decrease 1.6 billion yen year-on-year to 0.04 billion yen. This decrease is expected mainly due to a deterioration of equity in net income (loss) for EMI Music Publishing.
The net effect of other income and expenses is expected to be an expense of 13.6 billion yen ($112 million), a deterioration of 13.0 billion yen year-on-year primarily due to a decrease in the gain on sales of securities investments. In the same quarter of the previous fiscal year, a 7.4 billion yen gain on the sale of Sony’s share in Sky Perfect JSAT Holding Inc. was recorded.
Income before income taxes is expected to increase 76.4 billion yen to 164.7 billion yen ($1,361 million). Income taxes: During the current quarter, Sony is expected to record 54.7 billion yen ($452 million) of income tax expense, resulting in an effective tax rate of 33.2%.
Net income attributable to Sony Corporation’s stockholders, which excludes net income attributable to noncontrolling interests, is expected to increase 62.7 billion yen year-on-year to 89.0 billion yen ($736 million). ■