Sony cuts annual profit view on movie business writedown

TOKYO Sony Corp on Thursday cut its full-year outlook for operating profit on Thursday after the Japanese TV-to-gaming group took a $1 billion writedown on its struggling movie business.

Sony forecast group operating profit of 240 billion yen ($2.13 billion) for the year ending in March, down from a previous estimate of 270 billion yen.

It also said October-December operating profit fell to 92.4 billion yen from 202.1 billion yen a year earlier.

The company said earlier this week it had cut the goodwill value of its movie business by 112.1 billion yen due to a dimming outlook for earnings from DVD and Blu-ray discs.

But a weaker yen and an image sensor business recovering from April earthquakes at Japanese plants helped partially offset the movie business writedown.

Sony has stressed that the pictures segment overall – including television programs and media networks – would improve through efforts to cut costs and bolster income from intellectual property. The segment “continues to be an important business,” it has said.

Sony’s pictures segment, which accounts for some 10 percent of the company’s overall sales, is regarded as a key growth driver under its current three-year business plan through March 2018, along with image sensors, videogames and music.

Pictures supported Sony’s earnings during years of struggle in its core consumer electronics business. Its profitability prompted activist shareholder Daniel Loeb to urge Sony in 2013 to partially spin off the segment as well as the music arm to free up cash to revive the electronics business.

($1 = 112.5700 yen)

(Reporting by Makiko Yamazaki; Editing by Christopher Cushing)