Tag: Cyber attack

Q3-2015: Sony predicts higher loss for FY-2015

BENGALURU: About four months ago Sony Corp (Sony) had announced an expected loss of ? 50 billion for the financial year ending 31 March, 2015 (FY-2015). While announcing its forecast results for the third quarter ended 31 December, 2014 (Q3-2015), the company upgraded that figure by almost 5 times – to ? 230 billion as it wrote down the book value of its mobile communications (MC) unit.

While the MC unit will cross the revenue target of ? 900 to 1100 billion during FY-2015, it is likely to incur a loss of ? 215 billion on a higher forecast income of ? 1320 billion. Sony had earlier predicted that the MC unit would have a positive operating margin of between 3 to 5 per cent.

Note: Due to the aftermath of a cyber attack on Sony Pictures Entertainment Inc. (“SPE”), a consolidated subsidiary of Sony Corp (Sony) the results of which are reported as the Pictures business segment, had a serious disruption of its network and IT infrastructure. In order to provide timely disclosure of currently available financial information on a consolidated basis and foreach of its segments, Sony is disclosing forecasted results, which include the estimated impact of the cyberattack, on a consolidated basis and for the Pictures segment. Sony is also disclosing the actual results of its other segments, whose results were not impacted by the cyber attack, for the third quarter ended 31 December, 2014.The forecasts for consolidated results and the Pictures segment for the third quarter are based on the information currently available to management, and the actual results may differ from these forecasts. Sony plans on announcing its actual results for the third quarter by 31 March, 2015.

Nine segments contribute to Sony numbers: Mobile Communications, Game & Network Services (G&NS), Imaging Products & Solutions (IP&S), Home Entertainment & Sound (HE&S), Devices, Pictures, Music, Financial services, All other.

The company reported a 6.1 per cent increase in operating revenue/sales in Q3-2015 at ? 2257.8 billion as compared to the ? 2410.7 billion reported in the year ago quarter. Sony says that this increase is primarily due to the favourable impact of foreign exchange rates, an increase in MC segment sales reflecting an increase in unit sales of smartphones, an increase in Devices segment sales due to the strong performance of image sensors, and an increase in G&NS segment sales reflecting the strong performance of PlayStation 4 (PS4). This increase is expected to be partially offset by a decrease in sales in All Other, primarily related to Sony’s exit from the PC business, and a decrease in sales in the Pictures segment, mainly due to lower Motion Pictures and Television Productions sales. On a constant currency basis, sales are expected to decrease by 1per cent y-o-y.

Operating income is expected to increase 89.4 billion yen y-o-y to 178.3 billion yen ($1,474 million). During the current quarter, the net income attributable to Sony stockholders more than trebled (went up 3.4 times) to ? 89 billion from ? 26.4 billion in Q3-2014.

This increase is expected primarily due to an improvement in the operating results of the Devices, HE&S, G&NS, and IP&S segments. This improvement is expected to be partially offset by a decrease in operating income in the Pictures segment.

Segment Results

Mobile communications

MC reported a y-o-y growth of 28.7 per cent in sales to ? 429 billion in the current quarter from the ? 333.2 billion in Q3-2014. Operating income from this segment grew 46.2 per cent to ? 9.3 billion from ? 6.3 billion reported in the year ago quarter.

Game & Network Services (G&NS)

Sales for the G&NS increased 16.8 per cent y-o-y (an 8 per cent increase on a constant currency basis) to ? 531.5 billion ($4,393 million). The company says that this increase was primarily due to an increase in PS4 hardware unit sales, the favourable impact of foreign exchange rates and an increase in network services revenue, partially offset by a decrease in PlayStation®3 (PS3) hardware and PS3 software sales. Sales to external customers increased 19.7 per cent y-o-y.

Operating income of the unit increased ? 15.2 billion y-o-y to ? 27.6 billion yen ($228 million). This increase was primarily due to increase in sales, partially offset by the impact of the decrease in PS3 software sales, the unfavourable impact of the appreciation of the US dollar, as well as the recording of an ? 11.2 billion ($93 million) write-down of PS Vita and PS TV components.

Imaging Products & Solutions (IP&S)

Sales increased 1.5 per cent y-o-y (a 5 per cent decrease on a constant currency basis) to ? 201.0 billion ($1,661 million), primarily due to the favourable impact of foreign exchange rates, partially offset by a decrease in unit sales of digital cameras.

Operating income increased ? 10.9 billion y-o-y to ? 23.0 billion ($190 million). This increase was mainly due to a reduction in selling, general and administrative expenses and the favourable impact of foreign exchange rates, partially offset by the decrease in sales of digital cameras.

Home Entertainment & Sound (HE&S)

HE&S unit sales increased 2.3 per cent y-o-y (a 5 per cent decrease on a constant currency basis) to ? 413.3 billion ($3,416 million). This increase was primarily due to the favourable impact of foreign exchange rates and an increase in sales of televisions, partially offset by a decrease in Audio and Video sales. Unit sales of LCD televisions increased mainly due to an increase in North America and Europe, partially offset by a decrease in Latin America.

Operating income increased ? 18.9 billion y-o-y to ? 25.3 billion ($209 million). This increase was primarily due to cost reductions, partially offset by the unfavourable impact of the appreciation of the US dollar.

In Televisions, sales increased 10.1 per cent y-o-y to ? 280.6 billion ($2,319 million). This increase was primarily due to the increase in unit sales, and the favourable impact of foreign exchange rates. Operating income of ? 9.3 billion ($77 million) was recorded, compared to an operating loss of ? 5.0 billion in the same quarter of the previous fiscal year.

Devices

Devices sales increased 38.6 per cent y-o-y (a 26 per cent increase on a constant currency basis) to ?292.9 billion ($2,421million). This increase was due to an increase in sales of image sensors reflecting higher demand for mobile products, the favourable impact of foreign exchange rates, as well as an increase in sales of camera modules. Sales to external customers increased 47.2 per cent y-o-y.

Operating income of ? 54.5 billion yen ($451 million) was recorded, compared to an operating loss of ? 23.5 billion in the same quarter of the previous fiscal year. This improvement was primarily due to the recording of a ? 32.1 billion impairment charge related to long-lived assets in the battery business in the same quarter of the previous fiscal year, the above-mentioned increase in sales of image sensors, and the favourable impact of foreign exchange rates.

Pictures forecast

As a result of the cyber attack, Sony has disclosed forecasted results for the Pictures segment, which include the estimated impact of the cyber attack, for Q3-2015.

Pictures unit sales are expected to have decreased 11.7 per cent y-o-y (a 23 per cent decrease on a constant currency (U.S. dollar) basis) to ? 197.6 billion yen ($1,633 million). The expected decrease in sales on a US dollar basis is primarily due to a decrease in sales for Motion Pictures and Television Productions. The expected decrease in Motion Pictures sales is due to lower home entertainment and theatrical revenues. The expected decrease in home entertainment revenues is due to fewer major home entertainment releases in the current quarter as compared to the same quarter of the previous fiscal year while theatrical revenues are expected to have decreased due to the stronger worldwide performance of theatrical releases in the same quarter of the previous fiscal year. The expected decrease in Television Productions sales is due to the same quarter of the previous fiscal year benefitting from higher home entertainment and subscription video on demand (SVOD) revenues for the US television series ‘Breaking Bad’.

Operating income is expected to have decreased ? 21.9 billion y-o-y to ? 2.4 billion ($20 million) due to decrease in Motion Pictures and Television Productions sales. The current quarter is expected to include approximately $15 million U.S. dollars (? 1.8 billion) in investigation and remediation costs relating to the above-mentioned cyberattack.

Music

Music unit sales increased 13.1 per cent y-o-y (a 3 per cent increase on a constant currency basis) to ? 163.6 billion ($1,352 million) due to the favourable impact of the depreciation of the yen against the US dollar and an increase in Recorded Music sales. Recorded Music sales increased on a constant currency basis due to the strong performance of several releases and higher digital streaming revenues. Best-selling titles included One Direction’s Four, AC/DC’s Rock or Bust, Pink Floyd’s The Endless River, Foo Fighters’ Sonic Highways and Garth Brooks’ Man Against Machine.

Operating income increased ? 3.7 billion y-o-y to ? 25.4 billion yen ($210 million). This increase was due to the favourable impact of foreign exchange rates and the increase in Recorded Music sales.

Financial services

Financial services revenue increased 8.1 per cent y-o-y to ? 304.9 billion ($2,520 million) due to an increase in revenue at Sony Life. Revenue at Sony Life increased 8.2 per cent y-o-y to ? 279.1 billion ($2,307 million) due to an increase in insurance premium revenue reflecting an increase in policy amount in force, as well as an improvement in investment performance.

Operating income increased ? 4.5 billion y-o-y to ? 50.9 billion ($420 million). This increase was mainly due to an increase in operating income at Sony Life. Operating income at Sony Life increased ? 2.9 billion y-o-y to ? 51.2 billion ($423 million) due to an improvement in investment performance in the general account.

All other

All other unit sales decreased 46.7 per cent y-o-y to ? 144.3 billion ($1,193 million). This decrease was due to a decrease in sales reflecting Sony’s exit from the PC business.

Operating loss decreased ? 0.5 billion y-o-y to ? 14.3 billion ($118 million). Operating loss was essentially flat y-o-y due to a decrease in PC operating loss, partially offset by the deterioration of operating results in the disc manufacturing business.

February 5, 2015
Sony Corp’s quarterly report submission deadline extended

MUMBAI: Sony Corporation’s application for an extension of the deadline to file its quarterly securities report for the third quarter ending 31 March, 2015 has been approved by the director-general of the Kanto Finance Bureau of Japan.

The deadline has been extended from 16 February to 31 March.

As was reported earlier by Indiantelevision.com, the company had filed for the extension of deadline on 23 January, 2015 owing to the cyber attack at its Hollywood film unit, which compromised “a large amount of data” in its systems.

January 28, 2015
Sony Corp seeks to postpone earnings report over cyber attack

MUMBAI: Sony Corporation has asked the Financial Services Agency (FSA) of Japan for permission to delay the release of its earnings next month after a cyber attack at its Hollywood film unit compromised “a large amount of data” in its systems.

The media giant has submitted an application for approval of extension of deadline to file the quarterly securities report for the third quarter of the fiscal year ending 31 March, 2015.

In November 2014, Sony Corp’s motion picture business subsidiary Sony Pictures Entertainment Inc (SPE) identified a cyber attack on its network and IT infrastructure. As a result of the cyber attack, which has been now recognized as a highly sophisticated and damaging cyber attack, a serious disruption of SPE’s network systems occurred, including the destruction of network hardware and the compromise of a large amount of data on these systems. In response to this cyber attack, SPE shut down its entire network.

Since that time, SPE has been working aggressively to restore these systems. However, most of SPE’s financial and accounting applications and many other critical information technology applications will not be functional until early February 2015 due to the amount of destruction and disruption that occurred, and the care necessary to avoid further damage by prematurely restarting functions. After the restoration of these applications, SPE will immediately commence the actions necessary to close its third quarter financial statements.

However, the company said that even with the anticipated restoration of these applications in early February 2015, SPE will not have sufficient time to close its financial statements in time for submission of the quarterly securities report in the middle of February 2015.

“SPE must then enter transactional data for the two-month period the systems were offline and perform verification procedures over the restored data. For these reasons, Sony expects that it cannot complete its preparation, including the review by our independent accountants, of its consolidated financial statements for the third quarter of the fiscal year ending 31 March, 2015, by 16 February, 2015, the original deadline for submission of the quarterly securities report for this third quarter,” the company said.

Accordingly Sony has filed an application with the FSA for approval to extend the deadline for submission of the report to 31 March, 2015. Considering the current status, Sony expects that it can complete its preparation of its financial statements as described above and submit the quarterly securities report for the third quarter by 31 March, 2015.

Sony had planned to issue its earnings release and hold press/analyst conferences about the consolidated financial results for the third quarter of the fiscal year ending 31 March, 2015 on 4 February, 2015. Although Sony expects that SPE will not complete its third-quarter closing processes by the said date, for the reasons described above, the company plans to issue a release and hold press/analyst conferences on that date so as to provide investors, shareholders, analysts, media and other stakeholders with updated forecasts of Sony’s consolidated financial results for the third quarter, to the extent reasonably possible, based on the information available on that date. While Sony continues to evaluate the impact of the cyber attack on its financial results, it currently believes that such impact is not material.

January 23, 2015
India fourth in phishing attacks

NEW DELHI: India has ranked fourth in phishing attacks in the third quarter of 2013, said RSA, a division of EMC.

India received three per cent of the total attack volume, said RSA in a statement.
Other countries targeted by phishing attacks were US (53 per cent), Germany (17 per cent), UK (eight per cent) and South Africa (three per cent). In top countries by attacked brands’ India ranked third with seven per cent of the total phishing volume worldwide. The US with 27 per cent and UK with 12 per cent topped the chart.

RSA identified 46,119 phishing attacks in September globally with a rise in 36 per cent increase as compared to the month of August (33, 861). Phishing attacks in the month of September also mark the highest number of attacks in this quarter while July 2013 saw 45,232 numbers of attacks. Top countries to host these phishing attacks include US (42 per cent), Canada (nine per cent), Germany (five per cent) and UK (four per cent).

The total amount of losses incurred in third Quarter of 2013 was $1.66 billion.

Brands in the US, UK, India, and Australia were targeted by almost 50 per cent of phishing attacks in Q3 2013.

US remained the top country on the chart, targeted with 53 per cent of the total phishing volume in Q3 2013.

US incurred a loss of over $882 million followed by Germany with $294 million and UK with $133 million.

Meanwhile, cyber attack is likely to cost the average home user $418 in multimedia files, but a lot of this loss could be prevented if users purchase digital content after checking that the content is secure.

Kaspersky Lab in a statement that users can lose files in a number of different ways: losing a device, having a device stolen, or falling victim to malicious users.

According to the B2B International survey, 27 per cent of respondents encountered a cyber attack in the last one year. At the same time, over 60 per cent of users who were victims of malware that either damaged or destroyed data admitted that they had not been able to fully restore their files. During the same period, approximately 14 per cent of users dealt with the loss, theft or crash of their device.

Respondents in the 16-24 age group would face an average loss of $670, while those in the 25-34 group would incur an average loss of $455; users aged 45 and older would lose an average of $227.

Residents of China and Russia were likely to incur the highest average losses at $816 and $807 per user, respectively. This figure is considerably lower in Europe ($378) and North America ($342).

In order to protect digital assets, users not only need to back up their data on a regular basis – they also need to secure their personal devices against malicious attacks designed to steal or extort data. Smartphones and tablets should also have additional tools to help locate a lost device or to mitigate the potential damages of device theft.

December 3, 2013