Sony said its net annual loss will likely be smaller than previously forecast after cost cuts and strong sales of its image sensors and PlayStation video game consoles helped its third-quarter profitability. Sony expects the net loss in the year to March 31 to reach 170 billion yen ($1.4 billion). That compares with the 230 billion-yen loss it forecast earlier.

The company's sales revenue is expected to be 2,557.8 billion yen (21,139 million U.S. dollars), an increase of 6.1% compared to the same quarter of the pr evious fiscal year. This increase is primarily due to the favorable impact of foreign exchange rates, a significant increase in Sony's Mobile Communications segment sales reflecting an increase in unit sales of
smartphones, a significant increase in Devices segment sales due to the strong performance of image sensors, and a significant increase in Game & Network Services segment sales reflecting the strong performance of
PlayStation 4.

Sony expects this increase to be partially offset by a significant decrease in sales of other products, primarily related to Sony’s exit from the PC
business, and a significant decrease in sales in the Pictures segment, mainly due to lower Motion Pictures and Television Productions sales.

A restructuring push under Chief Financial Officer Kenichiro Yoshida has seen the company quit personal computers and put its TV manufacturing unit into a new division as it focuses on games, financial services and content to power earnings. Sony is investing 105 billion yen to accelerate a shift to image sensors at its chip unit for supplying its own mobile devices and those made by competitors.

Sony forecast its mobile division to post a full-year operating loss of 215 billion yen, steeper than the 204 billion yen loss it had expected in October.

Aiming to speed up a turnaround, it said it would cut 2,100 jobs in the unit by the end of the fiscal year through March 2016, including 1,000 cuts already announced.

Sony also reported preliminary quarterly earnings, with net income in the three months ended Dec. 31 of 89 billion yen. That compares with the 45.3 billion-yen average profit of four analyst estimates compiled by Bloomberg.

Sales for the quarter were 2.56 trillion yen, compared with the 2.35 trillion-yen average of seven analysts’ estimates.