Earnings Labs

Sony Group Corporation (SONY)

Q2 2019 Earnings Call· Thu, Oct 31, 2019

$19.96

-0.92%

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Transcript

Unidentified Company Representative

Management

Thank you for waiting. We shall start the Earnings Announcement of Sony Group for the Second Quarter of Fiscal 2019. I'd like to introduce our speakers today. We have Senior Executive Vice President, Chief Financial Officer, Hiroki Totoki; and Senior Vice President, Senior General Manager of Finance Department and Corporate Planning and Control Department, Naomi Matsuoka; Vice President, Senior General Manager, Global Accounting Division, Hirotoshi Korenaga. Today Mr. Totoki will make the presentation first, and then we'll follow that with the question and answers. Mr. Totoki, you have the floor.

Hiroki Totoki

Management

Today, I'd like to explain these 2 topics. FY '19 second quarter consolidated sales decreased 3% year-on-year to ¥2,122.3 billion primarily due to the impact of exchange rates. And operating income increased ¥39.4 billion year-on-year to ¥279 billion. Net income attributable to Sony Corporation stockholders increased ¥14.9 billion year-on-year to ¥187.9 billion. Next is the consolidated results forecast for fiscal '19. Consolidated sales are expected to decrease ¥200 billion compared with the previous forecast to ¥8,400 billion, and operating income is expected to increase ¥30 billion to ¥840 billion. I will explain the breakdown of sales and operating income for each segment later. Income before income taxes was upwardly revised to ¥800 billion, and the net income attributable to Sony Corporation stockholders up to ¥540 billion. The forecast for operating cash flow excluding the Financial Service segment is ¥760 billion, unchanged from the previous forecast. As for the Forex assumption for the second half, the U.S. dollar remains unchanged from the previous forecast ¥108 to the U.S. dollars, and the euro changed from ¥123 to ¥118 to the euro. Now first, I will talk about Game & Network Services segment. Sales for the quarter decreased 17% to ¥454.4 billion due to a decrease in sales of PlayStation 4 Game software and hardware as well as a negative impact of the foreign exchange rate. Game software sales decreased because of the absence of the major first-party hit title like Marvel's Spider-Man of the previous year and the significant year-on-year decrease in the contribution from the free-to-play games. Operating income decreased ¥25.6 billion year-on-year to ¥65 billion due to the impact of the sales decline. And we revised downward our fiscal '19 sales forecast by ¥200 billion to ¥2 trillion and operating income forecast ¥40 billion to ¥240 billion. As we announced…

A - Unidentified Company Representative

Operator

Now the floor is open to your questions. [Operator Instructions]. When the questions are asked in English, they will be interpreted into Japanese consecutively and answers will be given in Japanese. Please confine the number of questions to two per person. Anyone?

Unidentified Company Representative

Management

Thank you. With that, we will conclude our earnings announcement session today. Thank you for your participation.