Sega Sammy Reports FY13 Profits of $328.7 Million

Sega Sammy Reports FY13 Profits of $328.7 Million

by May 10, 2013

But Consumer Biz Still Operating at a Loss

There is mostly good news in Sega Sammy Holdings’s official earnings report for the 2013 fiscal year.  Though the company in whole remains healthy, the consumer business division–the subsidiary that includes Sega–is still operating at a loss, albeit a far smaller one than last year.

Sega Sammy recorded net income for FY2013 at $327.8 million on sales of $3.16 billion.  Sales were actually down close to 20 percent year to year, but profits shot up more than 50 percent, in part thanks to the accounting trickery the company announced last week.  But even that guidance overshot by some $10 million.

In Consumer Business, sales of $833.6 million for the year were recorded–a two percent decline from the FY2012–but the division still reported operating losses of $7.2 million.  Still, that is far better than the $148.6 million loss the division recorded last year.

In all, Sega sold 10.5 million pieces of software worldwide, including 4.2 million copies in North America, and 4.4 million in Europe.

Looking ahead, Sega Sammy estimated FY2014 sales to increase by more than 50 percent, including a more than 30 percent increase in Consumer Business.  Profits are expected to increase more than 40 percent.  Sega Sammy says the Japanese economy is expected to recover modestly over the next fiscal year, and the company offer this about Consumer Business:

The packaged game software field in the consumer business will undergo rationalization, in an effort to establish a structure that can consistently generate profit. We also intend to make our game software compatible with the next-generation game machines, which are due to be launched. Estimated total volume of packaged software sales is 11,660 thousand copies, including 4,310 thousand copies in the U.S., 4,690 thousand in Europe and 2,640 thousand in Japan. In the field of digital game software, we will endeavor to shift our business structure with a view to adapting to changes in the business environment, including greater focus on the development of the field of digital game software for mobile phones, smartphones and PC downloading.

The slight miss on profit may be hanging up investors some.  Sega Sammy stock in Japan closed down today less than one percent.  Current domestic shares on the pink sheets are unchanged, but the stock closed down more than two percent on Thursday.

We will have a complete breakdown of sales results from Sega Sammy’s earnings report shortly.