Investing.com -- Sony (TYO:6758) (NYSE:SONY) reported a sharp drop in first-quarter profit on Wednesday following weakness at its movie business, but the sprawling Japanese entertainment conglomerate still lifted its sales forecast at its key gaming unit.
Operating profit declined by 31% to ¥253 billion (¥1 = $0.6979) in the three months ended June 30, or roughly $1.8B, weighed down by a more than two-thirds decrease in film unit income that Sony called "significant." Marketing costs associated with the debut of more films in cinemas hit returns.
Sony also revised down its full-year sales forecast for its movies segment by 3% to ¥50B, citing the impact of ongoing strikes by Hollywood actors and writers. The labor actions will "lead to lower revenues mainly due to release date changes for some theatrical releases in Motion Pictures and delays in deliveries of television series in Television Productions," Sony said.
However, strong box office performances from recent titles like "Spider-Man: Across the Spider-Verse" as well as positive foreign exchange effects led the company to leave its profit forecast for the business unchanged.
Sony also raised its group-wide annual revenue outlook by 6% to ¥12.2 trillion, noting that it expects to sell 25 million PlayStation 5 consoles in its current financial year as supply chain constraints ease. It would be a record for the popular gaming platform, although sales have so far been less than expected.
Speaking to reporters, President Hiroki Totoki said that promotional drives in July may help make up for the sluggish start to full-year PlayStation 5 sales. But concerns remain that a lack of big-name first-party gaming releases could impact future demand.