Sony returns to profit in Q2, PS3 losses almost US$ 1 Billion!
Via CNN
Sony reported operating profit of 90.5 billion yen, reversing an operating loss of 20.8 billion the year before, when it spent heavily on financing the global recall of lithium-ion batteries used in laptop computers while wrestling with start-up problems for its PlayStation 3 (PS3) game console.
Five analysts polled by Thomson Financial had predicted Sony's operating profit would come in between 74.4 billion yen and 124.0 billion yen.
In the July-September period last year, Sony booked 51.2 billion yen in provisions for its global battery recall. It also booked a 54.5 billion yen write-down in the value of advanced semiconductor chips used in the PS3 following its decision to delay the PS3 launch.
Revenue expanded 12.3 percent to 2.08 trillion yen, led by brisk sales of its Cyber-shot compact digital cameras, Vaio PCs and Bravia liquid crystal display TVs.
Net profit surged to 73.7 billion yen from 1.7 billion a year earlier.
'Second-quarter sales reached a record high, led by brisk sales of our Vaio PCs, Cyber-shot digital cameras and Bravia LCD TVs, allowing us to also post an all-time high operating profit,' Sony chief financial officer Nobuyuki Oneda said at a press conference.
Sony estimates that a weak yen pushed up its quarterly operating profit by 30.3 billion yen from a year earlier, as the dollar rose to 117 yen from 115 yen a year earlier, while the euro appreciated to 160 yen from 147 yen a year earlier.
'Our electronics division saw a major rise in profitability thanks to the benefit of a weak yen and brisk sales of Cyber-shot digital cameras across the world and brisk overseas sales of Vaio PCs,' Oneda said.
In the September quarter, Sony's electronics division logged operating profit of 106.9 billion yen, up from just 8.0 billion yen a year earlier.
But the company's TV segment continued to bleed, making an operating loss of 21 billion yen in the quarter, larger than the operating loss of 10 billion yen a year earlier.
'Due to the weakness of the product line-up of our spring models, the street price of small-screen LCD TVs fell by 20-22 percent in the quarter from a year earlier, while the price of large-screen TVs dropped by 25-30 percent,' Oneda said in explaining the reason for the bigger loss of Sony's TV segment.
'But we expect the recently released, full high-definition and value-added models to be accepted well by consumers,' he said.
While the mainstay electronics division is showing steady improvement, performance in other segments was patchy.
Sony's game division incurred an operating loss of 96.7 billion yen, bigger than the loss of 43.5 billion yen the previous year, due to losses related to its PS3 launch.
'As we have taken the necessary accounting treatment to deal with the impaired value of inventories of the previous PS3 models in the first half, we aim to break even at the operating level in the second half, or better than breakeven,' Oneda said.
Including the operating loss it sustained in the second quarter, Sony already made operating losses of nearly 125 billion yen since the start of the current fiscal year.
'I cannot say at this point how much the division's loss will be in the full year,' Oneda said.
Sony had been selling its PS3 consoles at far less than production cost even before the latest price reduction. Therefore, the more game machines are sold, the bigger the loss of this division becomes.
Sony delivered 1.31 million PS3 consoles in the second quarter, up from 710,000 units in the first quarter.
'With the release of the new model, we are working hard to achieve the global sales target of 11.0 million PS3s for the full year, in line with the earlier estimate,' Sony investor relations manager Tatsuyuki Sonoda said.
On October 17, Sony cut the price in Japan of the most powerful version of the PS3 to 54,980 yen from around 59,800 yen.
The price cut comes as Sony struggles to recover its once-mighty position in the global video game market, where competition has heated up since Microsoft Corp (NASDAQ:MSFT) launched the Xbox 360 in 2005 and Nintendo Co introduced its Wii last November.
In the past quarter, Sony's movie business posted operating profit of 2.7 billion yen, reversing a year earlier operating loss of 15.3 billion yen, thanks to growth of its content distribution business.
Operating income at its financial service business fell to 23.1 billion yen from 24.6 billion yen.
The improvement in Sony's overall profitability comes in spite of a higher restructuring charge, which rose to 18.5 billion yen from 5.3 billion yen a year earlier.
For the year to March 2008, the company is now forecasting net profit of 330 billion yen, operating income of 450 billion yen and revenue of 8.98 trillion yen.
In July, it had projected a full-year net profit of 320 billion yen, operating profit of 440 billion yen and revenue of 8.78 trillion yen.
Sony reported operating profit of 90.5 billion yen, reversing an operating loss of 20.8 billion the year before, when it spent heavily on financing the global recall of lithium-ion batteries used in laptop computers while wrestling with start-up problems for its PlayStation 3 (PS3) game console.
Five analysts polled by Thomson Financial had predicted Sony's operating profit would come in between 74.4 billion yen and 124.0 billion yen.
In the July-September period last year, Sony booked 51.2 billion yen in provisions for its global battery recall. It also booked a 54.5 billion yen write-down in the value of advanced semiconductor chips used in the PS3 following its decision to delay the PS3 launch.
Revenue expanded 12.3 percent to 2.08 trillion yen, led by brisk sales of its Cyber-shot compact digital cameras, Vaio PCs and Bravia liquid crystal display TVs.
Net profit surged to 73.7 billion yen from 1.7 billion a year earlier.
'Second-quarter sales reached a record high, led by brisk sales of our Vaio PCs, Cyber-shot digital cameras and Bravia LCD TVs, allowing us to also post an all-time high operating profit,' Sony chief financial officer Nobuyuki Oneda said at a press conference.
Sony estimates that a weak yen pushed up its quarterly operating profit by 30.3 billion yen from a year earlier, as the dollar rose to 117 yen from 115 yen a year earlier, while the euro appreciated to 160 yen from 147 yen a year earlier.
'Our electronics division saw a major rise in profitability thanks to the benefit of a weak yen and brisk sales of Cyber-shot digital cameras across the world and brisk overseas sales of Vaio PCs,' Oneda said.
In the September quarter, Sony's electronics division logged operating profit of 106.9 billion yen, up from just 8.0 billion yen a year earlier.
But the company's TV segment continued to bleed, making an operating loss of 21 billion yen in the quarter, larger than the operating loss of 10 billion yen a year earlier.
'Due to the weakness of the product line-up of our spring models, the street price of small-screen LCD TVs fell by 20-22 percent in the quarter from a year earlier, while the price of large-screen TVs dropped by 25-30 percent,' Oneda said in explaining the reason for the bigger loss of Sony's TV segment.
'But we expect the recently released, full high-definition and value-added models to be accepted well by consumers,' he said.
While the mainstay electronics division is showing steady improvement, performance in other segments was patchy.
Sony's game division incurred an operating loss of 96.7 billion yen, bigger than the loss of 43.5 billion yen the previous year, due to losses related to its PS3 launch.
'As we have taken the necessary accounting treatment to deal with the impaired value of inventories of the previous PS3 models in the first half, we aim to break even at the operating level in the second half, or better than breakeven,' Oneda said.
Including the operating loss it sustained in the second quarter, Sony already made operating losses of nearly 125 billion yen since the start of the current fiscal year.
'I cannot say at this point how much the division's loss will be in the full year,' Oneda said.
Sony had been selling its PS3 consoles at far less than production cost even before the latest price reduction. Therefore, the more game machines are sold, the bigger the loss of this division becomes.
Sony delivered 1.31 million PS3 consoles in the second quarter, up from 710,000 units in the first quarter.
'With the release of the new model, we are working hard to achieve the global sales target of 11.0 million PS3s for the full year, in line with the earlier estimate,' Sony investor relations manager Tatsuyuki Sonoda said.
On October 17, Sony cut the price in Japan of the most powerful version of the PS3 to 54,980 yen from around 59,800 yen.
The price cut comes as Sony struggles to recover its once-mighty position in the global video game market, where competition has heated up since Microsoft Corp (NASDAQ:MSFT) launched the Xbox 360 in 2005 and Nintendo Co introduced its Wii last November.
In the past quarter, Sony's movie business posted operating profit of 2.7 billion yen, reversing a year earlier operating loss of 15.3 billion yen, thanks to growth of its content distribution business.
Operating income at its financial service business fell to 23.1 billion yen from 24.6 billion yen.
The improvement in Sony's overall profitability comes in spite of a higher restructuring charge, which rose to 18.5 billion yen from 5.3 billion yen a year earlier.
For the year to March 2008, the company is now forecasting net profit of 330 billion yen, operating income of 450 billion yen and revenue of 8.98 trillion yen.
In July, it had projected a full-year net profit of 320 billion yen, operating profit of 440 billion yen and revenue of 8.78 trillion yen.
Labels: hdtv
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