Sony Pictures Q4 Income Drops10 May, 2012 By: Erik Gruenwedel
Studio results undermined in part by upfront production and marketing costs associated with ambitious theatrical release slate
Sony Pictures Entertainment May 10 reported fourth-quarter (ended march 31) operating income of $104 million, down nearly 76% from operating income of $432 million during the previous-year period.
Sony Pictures, which includes Sony Pictures Home Entertainment, said revenue increased 10% to $2.2 billion, compared with revenue of $2 billion last year.
The studio attributed the operating income decline largely to year-over-year comparisons with business sales of the studio’s equity interest in HBO Latin America and minority interest in Spider-Man merchandising rights, among other actions. It said the results reflected in part the strong theatrical performance of The Smurfs and Bad Teacher, offset by the theatrical underperformance of Arthur Christmas. Home entertainment revenue primarily was driven by pay-TV and video-on-demand.
The studio didn't disclose revenue amounts generated from licensing agreements to subscription video-on-demand services and street-date availability of Sony titles at Redbox.
In addition, appreciation of the yen (compared with the dollar) and higher marketing costs for an increased slate of upcoming theatrical releases — notably The Amazing Spider-Man, which bows July 3 — had a negative impact on the operating income for the current fiscal year. Other major releases include Total Recall with Colin Farrell, Men in Black 3 and new James Bond movie, Skyfall, among others.
The much-anticipated Spider-Man reboot (the first release since Spider-Man 3 in 2007) features Andrew Garfield replacing Tobey Maguire in the title role and Emma Stone supplanting Kirsten Dunst. Director Marc Webb takes over the production from long-time Spidey helmer Sam Raimi.