SONY CORPORATION (NYSE:SNE) Q2 2020 Earnings Conference Call - Final Transcript

Aug 04, 2020 • 03:00 am ET


SONY CORPORATION (NYSE:SNE) Q2 2020 Earnings Conference Call - Final Transcript


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Masaru Kato

It is now time for us to start Sony Corporation's Fiscal Year 2020 First Quarter Earnings Briefing Session. I will be acting as the MC. My name is Kato from Corporate Communications Department.

This briefing is held for the media analysts and institutional investors who we have notified in advance. The audio and presentation materials can be viewed on our website.

Today, first of all, from the Executive Deputy President and CFO, Hiroki Totoki, we will give an explanation on consolidated financial results for FY 2020 Q1 and the forecast for FY 2020, and then have a question-and-answer session. It should last approximately 70 minutes.

Totoki-san, please?

Hiroki Totoki

Today, I would like to begin by addressing the operating environment surrounding Sony. The spread of the new coronavirus disease and increase in geopolitical risks such as the tension between the United States and China and the frequent occurrence of natural disasters in recent years are just a few things that are fundamentally changing society and economy, as well as people's values and lifestyles in a variety of ways. And these changes will not be limited to short-term and they are difficult to predict.

There is a saying that, "It's not the strongest of the species that survives nor the most intelligent, but rather the one most adaptable to change." Sony intends to adapt flexibly to the changes in the environment and increase the focus with which we manage each of our businesses.

The fiscal year ending March 31, 2021 of fiscal year '20 is an important year in which we expect to both recover from the impact of the spread of COVID-19 and formulate a strategy to address the business environment in the aftermath of the spread of the virus. We intend to improve the resilience of the Sony Group by leveraging advantage, which is the diversity of our personnel and businesses, adapt to changes and convert the crisis into an opportunity.

Now, I will explain the following. Fiscal '20 first quarter consolidated sales increased 2% compared to the same quarter of the previous fiscal year to JPY1,968.9 billion and consolidated operating income slightly decreased to JPY228.4 billion from the same quarter of the previous year, which is a record high.

Income before income taxes increased JPY88.9 billion to JPY319.9 billion, partially due to an improvement in unrealized gains on securities investments and other income and expenses.

Net income attributable to Sony Corporation stockholders for the first quarter increased JPY81.1 billion to JPY233.3 billion. Excluding extraordinary items, operating income would have been -- would have increased JPY2.2 billion from last year to JPY225.2 billion.

And this slide shows the results by segment for the fiscal '20 for the first quarter. After the previous earnings announcement we held in May, we were unable to reasonably predict the impact of the spread of COVID-19, so our consolidated results forecast for fiscal '20 was undetermined. Today, we are disclosing the consolidated results forecast for fiscal '20.

Consolidated sales are expected to be flat year-on-year at JPY8,300