Sony Corp. cut Tuesday its sales outlook for the current fiscal year through next March to ¥8.6 trillion ($79 billion) from ¥8.8 trillion forecast earlier, after the company lowered its sales expectations for PlayStation 4 hardware.
Sony’s sales downgrade, which represents a fall of 0.8 percent from the year before, came after the electronics and entertainment giant said in May it expected sales to rise 1.5 percent to ¥8.8 trillion.
Chief Financial Officer Hiroki Totoki said some consumers appear to be shying away from buying the PlayStation 4 because of its earlier announcement about a next-generation game console that is under development.
Sony slashed its annual sales target for the PlayStation 4 by 1 million units to 15 million for the current business year.
Totoki said the company remains cautious about potential effects of additional tariffs that U.S. President Donald Trump’s administration has mulled slapping on Chinese imports.
The fourth round of tax hikes, over which Trump and Chinese President Xi Jinping have agreed to resume negotiations, could affect Sony’s game hardware, cameras, audio equipment and projectors, Totoki said.
“We are simulating various responses in the event the tariffs are imposed” such as price changes, he added.
Televisions and smartphone sales are also projected to turn out lower in the current fiscal year, the company added.
It also expects a further rise in the yen, which erodes overseas profits when converted into its home currency. The U.S. dollar is projected to average ¥108 for the full year, compared to its earlier estimate of ¥110.
The company maintained its forecasts for operating profit and net profit for fiscal 2019 at ¥810 billion and ¥500 billion, respectively.
It expects the costs for developing the next-generation video game console to eat into its net earnings through the current business year.
For the April-June quarter, the Japanese electronics and entertainment giant saw group operating profit rise 18.4 percent from a year earlier to ¥230.93 billion mainly on solid sales of image sensors for mobile phones.
Its group net profit in the three-month period fell 32.8 percent to ¥152.12 billion, on group sales of ¥1.93 trillion, down 1.4 percent from a year earlier.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.