Sony Forecasts Record Profit as Camera Chips and TVs Fuel Recovery

Sony, which has staged a turnaround following a string of losses about a decade ago, increased its annual operating profit outlook to a record 630 billion yen ($5.6 billion) from 500 billion yen for the current fiscal year through March, according to Bloomberg. The last time it reported figures close to that threshold was in 1998.

Demand for high-end 4K televisions and wider use of camera chips helped to make up for slower growth in the PlayStation business and a lack of blockbuster films. The revenue forecast for the period was raised to 8.5 trillion yen from 8.3 trillion yen. Since taking charge in 2012, CEO Kazuo Hirai restructured the company and invested in key divisions.

In the latest quarter, Sony posted an operating profit of 204 billion yen, topping analyst projections for 139 billion yen in the period ended September. Net income was 131 billion yen, better than the prediction for 81 billion yen. A more favorable exchange rate also helped to fuel revenue, which topped estimates at 2.06 trillion yen.

Sony has invested billions to develop state-of-the-art image sensors, a move that is beginning to pay off as smartphone makers embrace the use of multiple cameras to improve image quality and create augmented reality features.

Operating profit from chips rose to 49 billion yen during the quarter, compared with a loss of 4.2 billion yen a year ago, when the division was still recovering from damaging earthquakes in Kyushu. Revenue rose 18 percent to 228 billion yen.

Sony held 42 percent of the image sensor market as of last year, according to researcher Yole Developpement. Besides image sensors, it’s now investing in 3-D sensors that can detect their environment by calculating how long it takes for light to reflect off surfaces. Mass production is slated for next year, with the new chips set to be adopted by next-generation AR devices and self-driving cars.

The company boosted its operating profit forecast in consumer electronics to 76 billion yen from 58 billion yen, driven by stronger sales of televisions. Sony has positioned itself as a provider of high-end 4K TVs, and consumers are showing they’re willing to pay higher prices for a premium experience.

In games, operating profit during the quarter rose to 55 billion yen from 19 billion yen a year ago. Revenue rose 35 percent to 433 billion yen. PS4 sales accelerated to 4.2 million units in the quarter, up from 3.9 million from a year ago. Sony increased the forecast for unit shipments this year, to 19 million from 18 million.