iPhone and drone cameras are helping Sony turn itself around

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.