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"Muppets Most Wanted" cast member Ricky Gervais photographs himself with fellow cast members, from left, Constantine, Miss Piggy and Kermit the Frog at the premiere of the film on Tuesday, March 11, 2014, in Los Angeles. (Photo by Chris Pizzello/Invision/AP)
Chris Pizzello/Invision/AP
Sony has a booming business in smartphone camera sensors.
SAY CHEESE

iPhone and drone cameras are helping Sony turn itself around

By Dan Frommer

Don’t look now, but Sony is starting to turn things around.

The company still has a lot to fix, but two bright spots—the PlayStation gaming division and Sony’s image sensor business—drove a small fiscal second-quarter profit on slightly declining revenue, which Sony reported today (Oct. 29) in Japan (pdf).

Its image sensors, found in devices ranging from Apple’s iPhone (paywall) to drones, generated ¥141 billion (about $1.2 billion) of revenue during the fiscal second quarter, up more than 20% year-over-year. And its broader “devices” business, which includes sensors, posted an operating income for the quarter that trailed only its successful but shrinking life-insurance business.

Sony is now putting more of its weight behind these sensors. It is acquiring Toshiba’s image sensor business for $166 million, and is also planning to spin some of its semiconductor businesses—including image sensors—into a new corporate structure next year, “to further reinforce this business, and concentrate on sustained growth.”

Sony expects image sensors to generate ¥570 billion ($4.7 billion) in sales this fiscal year, which ends next March, up 25% year-over-year. This was actually a slight drop, which Sony blamed on a “temporary decrease in image sensor production due to a production equipment problem” in its earnings slides (pdf).

Meanwhile, Sony’s gaming business is also driving growth. Second-quarter sales grew 16.5% to ¥361 billion (about $3 billion), and Sony—which is smartly being conservative in its guidance—modestly increased its full-year forecast for gaming revenue and operating income.