OREANDA-NEWS. Sony Corporation announced its consolidated financial results for the first quarter ended June 30, 2013 (April 1, 2013 to June 30, 2013).

Sales and operating revenue (“sales”) were 1,712.7 billion yen (17,300 million U.S. dollars), an increase of 13.0% compared to the same quarter of the previous fiscal year (“year-on-year”). This increase was primarily due to the favorable impact of foreign exchange rates, an increase in financial services revenue, and an increase in unit sales of smartphones. On a constant currency basis, sales decreased 3% year-on-year. This decrease was primarily due to the absence of the sales from the chemical products related business, as well as a decrease in sales of video cameras and compact digital cameras.

Operating income increased 30.1 billion yen year-on-year to 36.4 billion yen (367 million U.S. dollars). This improvement was primarily due to a significant improvement in the Mobile Products & Communications (“MP&C”) segment reflecting strong smartphone sales, and significantly higher operating income in the Financial Services segment, as well as the favorable impact of foreign exchange rates. Operating income during the current quarter includes a gain of 106 million U.S. dollars (10.3 billion yen) recognized on the sale of Sony Pictures Entertainment’s (“SPE”) music publishing catalog in the Pictures segment, and a benefit of 7.0 billion yen (71 million U.S. dollars) in the MP&C segment due to the reversal of a patent royalty accrual. Operating loss in the Game segment increased significantly primarily due to an increase in research and development expenses related to the upcoming introduction of the PlayStation®4 (“PS4”).

During the current quarter, restructuring charges, net, decreased 6.6 billion yen year-on-year to 4.7 billion yen (47 million U.S. dollars). Equity in net loss of affiliated companies, recorded within operating income, was essentially flat year-on-year at 0.4 billion yen (4 million U.S. dollars).

The net effect of other income and expenses was income of 9.9 billion yen (100 million U.S. dollars), an increase of 6.8 billion yen year-on-year, primarily due to an increase in other non-operating income. Income before income taxes increased 36.8 billion yen year-on-year to 46.3 billion yen (467 million U.S. dollars). Income taxes: During the current quarter, Sony recorded 26.7 billion yen (270 million U.S. dollars) of income tax expense. As of March 31, 2013, Sony had established a valuation allowance against certain deferred tax assets for Sony Corporation and its national tax filing group in Japan, the consolidated tax filing group in the U.S., and certain other subsidiaries. During the current fiscal year, certain of these tax filing groups and subsidiaries incurred losses, and as such Sony continued to not recognize the associated tax benefits.

As a result, Sony’s effective tax rate for the current quarter exceeded the Japanese statutory tax rate. Net income attributable to Sony Corporation’s stockholders, which excludes net income attributable to noncontrolling interests, was 3.5 billion yen (35 million U.S. dollars) compared to a net loss of 24.6 billion yen in the same quarter of the previous fiscal year.