Box-Office Hits Help Put Sony Unit Back in the Black

Sony Corp.’s film unit returned to profitability in its fiscal year ended March 31 with an estimated $240 million in operating income, compared with a huge $3.2-billion loss in the previous year, the Japanese electronics giant reported Wednesday.

The results are part of an overall turnaround for parent Sony, which posted net income of $511.8 million on revenue of $43.3 billion. Before taxes, the company’s profit was $1.3 billion.

The results for the Sony Pictures Entertainment unit, based in Culver City, were boosted by its television results as well as two profitable pictures released at the end of 1995, “Sense and Sensibility” and “Jumanji.” Also contributing to the results were the films “Bad Boys,” “The Net” and “Desperado,” and the foreign release of the movies “Legends of the Fall” and “Little Women.”

Sources said the profitable pictures offset the company’s money-losing films, which included “First Knight,” ’Money Train,” “The Juror” and “Mary Reilly.”

Another box-office dud, “City Hall,” that was released by Sony did not affect Sony’s results because producer Castle Rock Entertainment and its parent, Turner Broadcasting System, took the financial hit on the film. Castle Rock, which produces “Seinfeld” and made such films as “A Few Good Men,” is being shopped around to potential buyers, with Sony a potential suitor. Sony has an agreement to distribute Castle Rock’s product through 1997.

Sony Pictures reported $3 billion in sales and operating revenue (after figures were converted from yen to dollars), up from $2.8 billion in the previous fiscal year. Sony’s music group reported a slight increase in sales to $4.8 billion.

As for profit, Sony listed its two entertainment units as posting a combined $517 million in operating profit, but didn’t break down that amount between music and film. Sources estimate the operating profit of Sony’s film unit at about $240 million, with music’s profit higher. But Sony said its music unit’s operating profit was down from a year earlier, which it blamed on the continuing weakness among domestic music retailers.

Tokyo-based Sony traditionally releases somewhat sketchy results for its units, which is why it is often difficult to get a clear handle on the company’s exact performance compared with the year before.

In a briefing with reporters, Sony Pictures President Alan J. Levine said the results mark five consecutive profitable quarters for the company’s film and TV unit, which includes Columbia Pictures and TriStar Pictures. In the fiscal year ended March 31, 1995, the company lost $3.2 billion, which included a $2.7-billion write-down on movie-related assets as well as $510 million in additional operating losses.

At a Glance:

Federated Department Stores reported it lost $37.9 million during the first quarter, primarily because of the costs of absorbing Los Angeles-based Broadway Stores. The loss translated to 18 cents per share, compared with a loss of $57 million, or 31 cents a share, in the first quarter of 1995 that was the result of other acquisition expenses. Without those expenses, the company would have posted earnings of $9.3 million, or 4 cents a share.

Berkshire Hathaway said first-quarter earnings rose 11% after it bought the rest of insurer Geico Corp. The holding company controlled by billionaire investor Warren Buffett said its profit excluding gains from the sale of investments rose to $160.2 million, or $134 a share, from $144 million, or $122 a share, a year earlier.

The 1995 results were restated to reflect Berkshire’s $2.3-billion acquisition in January of the 49% of Washington-based Geico it didn’t already own.

Campbell Soup said its third-quarter earnings rose 14% on strong sales in its soup and Pace Mexican sauce lines, earning $145 million, or 58 cents a share, in the quarter, up from $127 million, or 51 cents a share, a year earlier.

Woolworth said its fiscal first-quarter loss narrowed as it reduced expenses and cut its debt almost in half. The operator of the Woolworth general merchandise and Foot Locker sports apparel chains said its loss narrowed to $22 million, or 17 cents a share, from $80 million, or 60 cents a share, in the year-earlier period.

Neiman Marcus Group reported third-quarter earnings of $11.5 million, or 30 cents a share, compared with a loss of $7.6 million, or 10 cents a share, in the same period a year ago. The 1995 loss reflected the sale of the Contempo Casuals apparel chain.

UnionFed Financial announced a net loss of $229,000 for the quarter. The parent of Los Angeles-based Union Federal Bank said the results for the quarter included the receipt of $1.5 million in federal income tax refunds and interest for prior year disputes. Without the impact of income tax refunds the company had an operating loss of $1.7 million for the quarter. It reported a loss of $8.2 million for the year-ago quarter.