Sony Pictures Nearly Doubles Q4 Income to $196 Million Driven by More Theatrical Releases

Sales rose 13% to $2.6 billion in the quarter but fell 10% for fiscal year 2023 due to strikes and lower licensing revenue

Sony Earnings
Photo illustration by TheWrap

Sony Pictures Entertainment, which is currently a focus of a possible acquisition of rival Paramount Global with private equity firm Apollo Global Management, reported a strong recovery in the last quarter of the fiscal year after the Hollywood strikes ended.

The division of Tokyo-based Sony Group reported a near doubling of operating income in the fourth fiscal quarter of 2023, on sales that increased 13.5% to $2.6 billion in dollar terms.

Here is a snapshot:

Operating Income: $196 million in Q4, up 98% from $99 million in the prior-year period.

Sales: $2.6 billion in Q4, up 13.5% from $2.29 billion

FY 2023 Sales: $9.46 billion, about flat from $9.54 billion in FY 2022 due in part to a weakening yen

In fiscal year 2023, Sony Pictures recorded sales of 1,493.1 billion yen, which on a yen basis grew 9% due to more theatrical releases and the impact of foreign exchange rates. The result was offset in part by a decline in the number of TV program deliveries.

Operating income for 2023, on a yen basis, was essentially flat compared to fiscal year 2022 due to an increase in marketing costs to support more films, which was offset somewhat by the increase in the number of sales, the company said.

The Hollywood strikes had a negative impact on profitability totaling an estimated 18 billion yen ($115 million), caused by changes in film release schedules and delays in the delivery of TV programs. “We believe the negative impact of the strikes on profitability will peak in FY2024,” the company said in its earnings presentation.

For the full fiscal year 2024 Sony said it had incorporated 34 billion yen ($217 million) of strike impact into its forecast.

The studio plans to release tentpole films in 2024 including “Bad Boys: Ride or Die,” the Marvel sequel “Venom: The Last Dance” and “Kraven the Hunter.”

Sony said it expects streaming service Crunchyroll to contribute more to the overall operating income of the Pictures segment due to subscription growth and overseas distribution of anime products, as well as the reduction of expenses related to the 2021 acquisition.

Sony and Apollo have made a joint bid of $26 billion to acquire Paramount Global. The Paramount board of directors’ special committee ended exclusive talks with Skydance Media for the production company, founded by CEO David Ellison, to acquire Paramount. The committee, charged with exploring strategic alternatives for Paramount, has since opened talks with Sony and Apollo about their offer.

In pre-market trading shares of Sony Group were up about 2%.

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