29% drop in profit for Japanese tech giant

Sony on Thursday reported a 29% drop in operating profit in the fiscal second quarter as the Japanese electronics giant suffered from weakness in its imaging sensor — or chip — business.

Here’s how Sony did in the September quarter versus LSEG consensus estimates:

• Revenue: 2.8 trillion yen ($18.5 billion) versus 2.87 trillion yen expected. That represents an 8% increase year-over-year.
• Operating profit: 263 billion Japanese yen versus 304.4 billion yen expected. That marks a 29% drop year-over-year.

Sony attributed the significant drop in profit to weakness in its imaging sensor business, as well as declines in profit at its financial services and entertainment, technology and services businesses.

The company said profit in its chip division fell over 28% in the fiscal second quarter.

Sony supplies camera chips to consumer technology manufacturing giants like Apple, which uses its semiconductors in its iPhones.

Despite the slide in profit, the company increased its sales forecast for the full year, saying it now expects total sales of 12.4 trillion yen (up from earlier forecasts of 12.2 trillion yen) as it benefits from positive foreign exchange rates.

The Japanese yen has weakened significantly versus the dollar, and Sony makes most of its income outside of the U.S.

Thursday’s results follow a fiscal first quarter which saw Sony report a 33% rise in revenue year-over-year to 3 trillion Japanese yen but a 31% year-on-year drop in profit to 253 billion yen. The company at the time cited weakness in its financial services and pictures division, which saw a small slump on the back of strikes carried out by the Writers Guild of America and other unions, in protest against using artificial intelligence to generate movie scripts.

This is a developing story and will be updated shortly.