Sony surprised everyone with a record of earnings, such as a sensor of demand compensates for weakness in gaming

TOKYO (Reuters) – japan’s Sony Corp (6758.(T), surprised the market by reporting on Tuesday it set a record in the first quarter, the operating profit, in spite of the slowdown of the gaming industry, including the demand for a multi-lens camera systems in smartphones to boost sales of the image sensors.

FILE PHOTO, Sony image sensors and are displayed at the company headquarters in Tokyo, Japan, on November 27, 2017. The photo was taken on November 27, 2017. REUTERS/Toru Hanai

Sony is benefitting from the sales of the more powerful smart phones to the customers, including Huawei Technologies, the set-off gaming is a weakness, as the almost-six-year-old a PlayStation 4 console, the console is nearing the end of his life, and the costs incurred for the development of a next-generation console will increase.

“In our own image sensor, and the revenues have increased, independent of the smartphone market’s growth,” thanks to the smartphone-makers’ adoption of a multi-lens camera and a large-size image sensor, as the Chief executive Officer (ceo Hiroki Totoki told an earnings briefing.

“Our production facilities are at full capacity.”

The electronics company posted an operating profit of 230.93 billion yen ($2.1 billion) for the April-June quarter, up 18.4% from a year earlier, and exceeding the consensus estimate of 173.61 billion yen by eight analysts compiled by Refinitiv.

The company, which for two consecutive years of record earnings, maintained its full-year sales forecast for the fiscal year that ended in March-at 8 to 10 billion yen.

The imaging and sensing to the business community, which is an image that includes the sensors, has reported a profit of 49.5 billion yen, an increase of 29.1 billion yen a year earlier, comfortably offset from the 9.6 billion decrease in its profits in the gaming business, the biggest gains in employment.

However, some analysts are saying that Sony is likely to be sensitive to the situation of Huawei, a large image of senor client, that Washington has placed on a “black list” in mid-May, although the Chinese company said smartphone shipments rose by 24% in the first half of the year.

Jefferies estimates, and Huawei accounted for 15% -20% of Sony’s image sensor revenue, for the prior year.

“The concerns about trade and trade-related matters, the second half of the year,” Totoki said at a briefing, adding that Sony will closely monitor the situation during the July-September quarter, to assess the impact on the annual profit.

Daniel Loeb’s activist hedge fund Third Point LLC, Sony for a spin-off of the imaging and sensing to the business and to position itself as an entertainment company.

Totoki said the company is always open to the suggestions of the shareholders, but also to repeat the image sensor, the company is one of the key pillars in the growth strategy of the company.

He added that the annual earnings forecasts are not taken into account in a potential fourth installment, the rates are in the $300 billion worth of goods, of which Washington was held out of the launch, a move that was almost all Chinese imports into the United States are affected by the rates.

In the fourth installment, if implemented, would have an impact on the gaming consoles, cameras, audio equipment, and projects, ” he said.

Sony’s shares closed almost flat on Tuesday, before the results were released, while the rest of the market .N225 climbed 0.4%.

The stock hit an 11-year highs in September, but has been battered this year by concerns that the profit the gaming company has created a peak.

Reporting Makiko Yamazaki; Editing by Stephen Coates and Muralikumar Anantharaman

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