Sony's turnaround is right on track as the Japanese electronics and entertainment company posted quarterly profit , thanks to demand for smartphone camera chips, music business and solid sales of PlayStation 4 consoles and games.
Operating profit was 157.6 billion yen ($1.4 billion) in the fiscal first quarter that ended in June. Sales rose 15 percent to 1.86 trillion yen, topping predictions.
The increasing number of PlayStation 4 owners is driving sales of software and online services, while smartphone makers adopt more camera chips per device and more people pay to stream music. Still, Sony is keeping its full-year profit guidance of 500 billion yen, even though it lifted its sales forecast by 3.8 percent to 8.3 trillion yen.
Games, the biggest division by revenue, saw operating profit decline 60 percent to 17.7 billion yen, while sales rose 5.4 percent to 348.1 billion yen. Despite the profit drop this quarter, Sony upgraded its games profit guidance for the full year by 5.9 percent and sales by 4.8 percent. It sold 3.3 million PlayStation 4 units during the quarter, slightly down from 3.5 million last year.
Operating profit in chips was 55.4 billion yen, recovering from a loss a year earlier, as the company recovered from last year's earthquake and demand from phone makers increased due to the rising popularity of multiple-sensor models. Sony controls about half of the market for image sensors.
The company increased its annual profit guidance for semiconductors by 8.3 percent, but lowered its sales forecast by 2.3 percent. That drop is probably due to the expected delay in Apple's upcoming OLED iPhone version, which will push Sony's sales out to the next period.
In music, where operating profit grew to 25 billion yen, Sony benefited from its partnership with Spotify, which has tripled paying subscribers to 60 million in the past two years. The two companies struck a new licensing deal which will see more of Sony's music available only to paying Spotify users, the Financial Times reported last month.