Sony earnings boosted by weak yen and smartphone sales

Image caption,
Sony has launched new models in an attempt to boost its share of the smartphone market

Sony has reported a jump in profits for the April-to-June quarter, boosted by a weak yen and surge in smartphone sales.

It made a net profit of 3.5bn yen ($35m; £23m) in the quarter, reversing a loss of 24.6bn yen last year.

Many Japanese firms have seen their profits jump amid a sharp decline in the yen's value - which lifts profits when they repatriate their foreign earnings back home.

The yen has dipped nearly 25% against the US dollar since November.

A weak currency also makes Japanese goods more affordable for foreign buyers, helping boost sales of exporters such as Sony.

The company said its sales rose 13% in the three months to the end of June, from a year earlier, primarily "due to the favourable impact" of the currency movement.

It also raised its sales forecast for the current financial year to 7.9 trillion yen from its projection of 7.5 trillion yen in May.

Smartphone boost

Sony said its profit was also boosted by a rise in smartphone sales, as well as an increase in the average selling price of the handsets.

Sales in its mobile products and communications division, which manufactures smartphones, rose 36% from a year earlier.

Sony has launched new models in an attempt to boost its share of the fast-growing smartphone market and take on competitors such as Samsung and Apple.

Last month, it announced a waterproof Android smartphone with a 6.4in screen (16.3cm), the Xperia Z Ultra, which it pitched as the slimmest large-screened handset on the market.

It can also accept sketches or notes written using a standard pencil or metal-tipped pen in addition to an optional stylus.

It had unveiled a the original Xperia Z smartphone with a 5in screen in January this year.

However, some analysts said that it is too early to predict whether Sony will be able to match the success of its rivals in the sector.

"One thing which will be interesting to see is where their handset sales and profits come from," Gerhard Fasol of Eurotechnology Japan told the BBC.

"If they are coming only from Japan, where they have the home advantage, then the growth will be limited - but if they see their global sales rise, then it will be a big positive in the long run."

Entertainment spin-off

The numbers have come at a time when Sony has been facing pressure from one of its biggest shareholders, hedge fund Third Point, to siphon off 20% its entertainment division.

The founder of the fund, Daniel Loeb, has called upon Sony to use the cash from such a move to boost its ailing electronics arm.

Image caption,
Sony's entertainment division benefited from the success of movies such as Men in Black 3

On Thursday, the firm's chief financial officer, Masaru Kato, said that it "is a very important proposal and we will respond after thorough discussion".

However, some analysts said that the company was unlikely to accept the proposal, not least because of the positive results in the April-to-June quarter.

"Third Point can keep up the rhetoric and keep making suggestions," said Mr Fasol.

"Sony will listen to it - but it is unlikely they will siphon off a division just because one shareholder wants them to do so.

"And Sony's refusal will only become stronger now because it looks like they are starting to get the firm back on track," he added.

According to the latest numbers, Sony's Pictures division made a profit of 3.7bn yen during the period, reversing a loss of 4.9bn yen last year.

Its music unit saw its operating profit rise to 10.8bn yen, from 7.3bn yen a year earlier.

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