Sony shares jump on entertainment growth targets
Shares of Sony Corp. rose more than 6% in Tokyo after the company said Tuesday it aims to increase its motion picture revenues by more than a third in the next three years.
The company said it is targeting sales for its pictures division -- behind movies such as “The Amazing Spider-Man” and “22 Jump Street” and TV shows including “Breaking Bad” -- to hit $10 billion to $11 billion in the fiscal year that ends March 31, 2018.
That would be an increase of up to 36% from this year’s projected revenue of $8.1 billion.
The company also said it’s aiming for operating income margin of 7% to 8%, compared with 6.6% for the current year.
Sony President and Chief Executive Kazuo Hirai said in remarks at an investor meeting that the company’s entertainment businesses, including Sony Pictures Entertainment and Sony Music Entertainment, are “extremely important” for the electronics and media giant’s overall strength and have been profitable for 18 straight years.
“Clearly they are important and large pillars of our business, as Sony has managed these business for almost half a century,” Hirai said.
This comes more than a year after the company rejected a proposal by activist investor Daniel Loeb to spin off part of the entertainment arm. In May, 2013, Loeb delivered a letter to Hirai that outlined a proposal for the company to make an initial public stock offering of up to 20% of its entertainment business.
That plan was rejected in August 2013.
Michael Lynton, chief executive of Sony Entertainment, pointed to growth opportunities from tent-pole films, television production and media networks.
Sony’s upcoming movies include an update of the musical “Annie,” the Screen Gems comedy “The Wedding Ringer,” and next year’s James Bond film, the 24th in the franchise. Lynton also noted planned films based on PlayStation games.
“In the motion pictures division, growth will be driven by a sharper focus on tent-pole films and greater profit potential,” he said.
Sony also said it is aiming for $4.8 billion to $5.2 billion in revenue from its music business for fiscal 2018, compared with $4.8 billion for the current year.
Earlier this month, Sony Corp. posted a loss of $1.25 billion for its second quarter, due in part to a big writedown on its struggling mobile communications arm.
Follow Ryan Faughnder on Twitter for more entertainment business coverage: @rfaughnder
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