Sega Sammy Reports Q1 Net Profit of Nearly $32 Million

Sega Sammy Reports Q1 Net Profit of Nearly $32 Million

by July 31, 2012

But Sega Itself Still Losing Money

Sega Sammy stock was down about two percent in early trading on the pink sheets this morning after the mothership in Japan released earnings for Q1 2013 that were good in whole, but still lagging in the consumer business division.

Sega Sammy earned close to $32 million in net profit on sales of over $895 million for the quarter.  The sales number is up seven percent, and the profit is much better than the loss posted in Q1 2012.  But in the area that counts most to gamers–consumer business–sales were down seven percent in this quarter compared to the same period last year to more than $190.5 million.  The division still lost over $19.1 million in Q1, though that’s better than the $48.6 million loss posted the same time last year.

Data was only released for one game.  Sega’s official game for the Summer Olympics in London sold 510,000 copies worldwide through June 30th.  The recent boost in Britain coinciding with the actual Olympics commencement is not factored into these numbers.  No mention is made of Sonic the Hedgehog 4: Episode II–arguably Sega’s most significant Western release in the quarter.  In fact, only numbers for packaged games are reflected in the earnings reports, and with Sega’s recent refocus to digital, just 1.34 million packaged titles were sold in the quarter, compared to 2.23 million in Q1 2012.

Investors could be looking at a rough second quarter coming up.  The mothership expects Sega to lose over $76.7 million through October.  An operating profit of just under $6.4 million is expected for the entire fiscal year, but it now appears a lot of that will depend on how well Sonic & All-Stars Racing Transformed performs in the West.  If it flops, Sega could be in a lot of trouble again early next year.