Sony Posts $1B Profit For Q3 2015 But Feels Pinch From Slowing Mobile Market

Another quarter of promise for Sony. The Japanese tech giant just released its Q3 2015 financial results, posting net income of 120.1 billion JPY ($1 billion) on total revenue of 2,580.8 billion JPY ($21.5 billion) — those figures are up 33.5 percent and 0.5 percent year-on-year. Operating income came in at 202.1 billion JPY ($1.7 billion), an 11 percent rise on a year previous.

Those figures surpassed analyst expectations — according to a FactSet poll — and follow a decent quarter of business in Q2 2015, which include a slim $280 million profit. However, Sony continues to struggle on mobile.

In Q3 2015, its mobile business unit saw its total revenue decline 14.7 percent to 384.5 billion JPY ($3.2 billion), although operating revenue grew by 133 percent to $201 million. That’s because Sony is scaling back its struggling smartphone business, in the face of struggles across the industry as global smartphone sales growth continues to slow.

In Sony’s words: “this decrease was due to a significant decrease in smartphone unit sales resulting from a strategic decision not to pursue scale in order to improve profitability.” The company added that reduced spend on marketing and promotion, coupled with “a shift to high value-added models,” improved the operating revenue figure significantly.

Instead it was the company’s chip business, which has grown thanks to image sensors used by a number of phone makers, which dragged. That division carded an operating loss of 11.7 billion JPY ($97 million) as revenue dropped 12.6 percent on account of “a decrease in demand for mobile products, and a significant decrease in battery business sales,” Sony said.

So, while Sony has cut its reliance on smartphones sold to consumers, it couldn’t entirely shelter itself from the chill affecting the mobile industry, which hit it in its sensor business instead.

Away from mobile, PlayStation continues to be a bright spot for Sony. Its video games console business posting a 10 percent increase in quarterly revenue as operating profit jumped 45 percent to reach 40.2 billion JPY ($335 million). Sony put these changes down to a previous write-down of PS Vita and PS TV components, and an increase in PlayStation 4 sales.

Elsewhere, Sony’s imaging business — responsible for digital/video cameras — saw revenue drop 5 percent to $1.6 billion, but operating profit rise 20 percent to $197 million. It was a similar story for the company’s home entertainment — revenue down 4.3 percent to $3.35 billion, profit up 19.8 percent to $260 million — while Sony’s music and pictures businesses both contributed profit ($228 million and $170 million) based on increased revenue for the quarter — up 8.2 percent and 26.9 percent respectively.