Sony's  (SNE)  transition into a high-end consumer electronics group hasn't wavered even as earnings at the Japanese maker of PlayStation and Xperia smartphones continues to suffer from a stronger yen.

The Tokyo-based consumer electronics group reported an 86% second-quarter slump Tuesday, but nonetheless repeated its "shifting focus to high value-added products" message across three of its business lines that have suffered declines.

Sony reported a second-quarter net of ¥4.8 billion ($46 million) on sales of ¥1.69 trillion after markets closed in Tokyo, each down 85.6% and 10.8% from a year earlier. Operating profit dropped 48% to ¥45.7 billion.

The company had warned Monday it would be booking a writedown and tax expenses from the sale of its battery business to Murata Manufacturing, but also attributed a large part of the weak result to yen appreciation -- which is up 16% against the U.S. dollar from last year -- and said Playstation 4 performance was hurt by price revisions. 

Sony saw revenue decline in seven of its 10 segments in the second quarter, with only its pictures, music, and financial services businesses seeing expansion. 

Mobile communications, imaging products and solutions, and home entertainment and sound segments were standouts to the downside, but Sony nonetheless noted it had improved its product mix by shifting its focus to high value-added products.

In the mobile communications segment, a 39.6% revenue drop was partially offset by "concentration on high value-added models." The message was similar for the imaging products and solutions segment, which reported a 25.2% sales decline.

Sony noted a similar trend for the home entertainment and sound segment, which saw high value-added products providing a boost to the operating level and reducing the impact of a contracting home audio and video equipment market.

Whether Sony can pull off this high-end strategy remains to be seen in a country where prices are continuing to decline, and in a market where cheaper products are gaining presence.

Japan's consumer price index has dropped nine of the last 12 months. Meanwhile, research by Gartner shows that in the smartphone market, Chinese brands such as Huawei, Oppo and Xiaomi are grabbing share away from high-end names.

Turning to the bright spot in Sony's earnings, the pictures segment enjoyed major boosts from films such as Ghostbusters, Sausage Party and Don't Breathe, as well as TV series such as The Crown and The Get Down. The music segment enjoyed growth from mobile game Fate/Grand Order, while the financial services segment saw revenue jumped 24% as Sony Life Insurance benefited from rallies in Japanese stocks.

On Monday, Sony cuts its net profit forecast for the year ending March 2017 to ¥60 billion from ¥80 billion. The company also lowered its guidance at the operating level to ¥270 billion from ¥300 billion, and for pretax profit to ¥250 billion from ¥270 billion.

Since the beginning of April, the start of Sony's fiscal year, the yen has appreciated nearly 7% against the dollar and 10% against the euro. Yesterday, the company revised its foreign exchange assumption for the rest of the year to ¥101 to the dollar from ¥103, and to ¥113 to the euro from ¥114.

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