Sony Pictures Entertainment posted $115 million in operating income for the three months ending June 30, down 71% on a dollar basis from last year’s comparable first quarter despite a stronger theatrical slate.
Films released during the period this year were led by Spider-Man: Across the Spider-Verse which grossed $591 million worldwide as of the end of June (currently $684 million). Other titles included The Pope’s Exorcist ($75 million global) and No Hard Feelings ($40 million global).
Regarding adjusted OIBDA (Operating Income Before Depreciation and Amortization), Sony said the Pictures division came in 57% lower than the same period in 2022. The drops were attributed to a decrease in sales and higher marketing costs in support of a greater number of theatrical releases.
Sales in the division were $2.33 billion, down from $2.64 billion a year ago. The results were impacted by a decrease in deliveries of U.S. television series as well as lower home entertainment and digital streaming service licensing revenues compared to the first quarter of 2022 which benefitted from the contribution of several franchise films released theatrically in fiscal year 2021. On the plus side, this year’s first quarter saw higher theatrical revenues.
Last year at this time Sony noted there had been an increase in series deliveries, higher TV licensing and home entertainment revenues during the April-June period, plus higher sales of streaming services, which included the impact of buying anime streamer Crunchyroll. Today, Sony said the service had 12 million subscribers through July.
Reporting earnings from Tokyo this morning, Sony Corp said it had revised full-year forecasts for the fiscal year ending March 31, 2024 although profits in the Pictures segment are unchanged at a projected 120 billion yen ($838.1M). Revenues, however, are expected to be slightly lower than the previous forecast, primarily due to the impact of the ongoing WGA and SAG-AFTRA strikes leading to release date changes for some films and delays in deliveries of television series – though this will be partially offset by the impact of foreign exchange rates.
Features currently slated to release in Q2 include Gran Turismo, The Equalizer 3 and Dumb Money. Blumhouse’s Insidious: The Red Door, which recently became the top-grossing horror movie of the year, will also figure in the second quarter.
Overall, the electronics and entertainment giant reported a 30.6% fall in first-quarter operating profit to 253 billion yen ($1.77 billion), in line with analyst estimates. Revenues in the Financial Services, Games & Network Services, Imaging & Sensing Solutions and Music segments saw increases while operating income was significantly up in Music as well.
During an earnings call, Sony Corp President Hiroki Totoki addressed the strikes, saying a delay in production has led to concern about advertising, noting “we have to pay close attention.” The content investment of streamers “may not decrease immediately, but as result of the strike” production will be impacted.” He added, “We aim to work with the AMPTP to find a resolution as soon as possible.”