FILE PHOTO: An employee takes a photo on a new Sony Xperia 10 Plus in this posed photograph at a pre-launch event at the Sony offices in London, Britain February 14, 2019. REUTERS/Simon Dawson/File Photo

TOKYO (Reuters) – Sony Corp (6758.T) on Wednesday said quarterly operating profit jumped 16% on robust image sensor sales, its strongest-ever result for the second quarter, and it raised its full-year earnings outlook.

Operating income for the Japanese entertainment and electronics firm came in at 279 billion yen (2.02 billion pounds) for the July-September quarter, above the 239.5 billion yen in the same period a year earlier.

The result beat an average estimate of 235 billion yen drawn from nine analysts compiled by Refinitiv.

Sony raised its annual profit forecast to 840 billion yen from an earlier estimate of 810 billion yen. That was a tad under a consensus estimate of 848 billion yen from 23 analysts and somewhat below last year’s record profit of 894 billion yen.

Demand for smartphone image sensors has been robust, as phone manufacturers introduce multiple-lens camera systems for high-end models – a key differentiator as improvements in other phone functions and features have slowed.

Apple, for instance, added a third lens to the iPhone 11 Pro model, matching the three-camera setup on flagship models for rivals like Samsung Electronics Co Ltd(005930.KS) and Huawei Technologies Co Ltd [HWT.UL].

But profit at Sony’s gaming business dropped as contributions from big gaming hits last year, such as “Marvel’s Spider-Man”, waned and sales for its mainstay PlayStation 4 console, now six years old, fell.

Sony also faces harsher competition as Google parent Alphabet Inc (GOOGL.O) and Apple Inc (AAPL.O) have entered the market for game streaming services. To better compete with new rivals, Sony this month slashed its annual subscription fee for the PlayStation Now cloud gaming service by 40% to $59.99.

Sony’s sensor division saw operating profit rise to 76.4 billion yen from 47.9 billion yen a year before, while profit at the gaming business fell to 65.0 billion yen from 90.6 billion yen.

Reporting by Makiko Yamazaki; Editing by Edwina Gibbs

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