Sony’s profit down 86% but its costly mobile business has been shored up

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Sony’s profit dropped 86 percent year-on-year as the strong performance of the Japanese Yen, fallout from the Kumamoto earthquake and company restructuring weighed on its Q2 2016 earnings.

The Japanese electronics giant posted a small $48 million (4.8 billion JPY) profit in its Q2 2016 financial period, down from $205 million last year. On the positive side, though, its mobile business again showed that it has stopped bleeding cash.

The Sony Mobile business had long impacted earnings, costing it over $500 million over its last financial year, but thanks to downsizing and a focus on models with higher margins its performance has been shored up. Sony Mobile Communications carded a $37 million (3.7 billion JPY) profit for Q2, a huge improvement on the $172 million (20.6 billion) loss from one year ago and progress on the previous quarter’s ¥400 million ($4 million) operating profit.

Sony sold 3.5 million smartphones in its most recent quarter, although total sales were down 40 percent year-on-year as the company reduced its mid-range product family and concentrated on regions where it is strongest.

Sony’s PlayStation business, its most notable performer, saw sales decline by 11 percent year-on-year primarily due to currency changes. With 319.9 billion JPY ($3.2 billion) generated from the quarter, it was again Sony’s top performing business unit.

Elsewhere, the home entertainment business posted a $174 million (17.6 billion JPY) profit, up 11 percent year-on-year despite revenue declining 19 percent over the same period. Sony’s semiconductor business was impacted by Kumamoto, carding a $41 million (4.2 billion JPY) loss as revenue dipped five percent annually. Its component business also reported a loss for Q2 2016 — $363 million (36.6 billion JPY) — as increased competition in batteries took its toll.

There were positive results for Sony in the media space with its Pictures business — $32 million (3.2 billion JPY) profit as revenue rose five percent — and Sony Music, profit up 15 percent to $164 million, 16.5 billion JPY.