Sony Reports Net Profit Spike, Upgrades Full-Year Forecast
In stark evidence that Sony’s turnaround efforts of the last year may have taken hold, the company reported Thursday nearly a 700 percent increase in its net profit for its third quarter through December and a swing to a $1.6 billion operating profit, based on 92 yen to $1, from a loss a year earlier. The results, which Sony said “significantly exceeded expectations,” prompted the company to upgrade its full-year operating forecast. Sony said it still expects to finish the year with an operating loss, but of only half the size forecast in October.
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Sony’s consumer products and devices business, which includes core AV products and TVs, swung to a $537 million operating profit from a year-earlier loss on lower selling, general and administrative expenses and a better “cost of sales ratio,” the company said. It’s presumed that Sony achieved those savings at least partly through job cuts achieved with a companywide voluntary retirement program that started early in calendar 2009. But the division’s sales fell 10.7 percent to $10.5 billion, mainly because Bravia LCD TV sales suffered from “intensified price competition,” it said. Sony’s TV sales fell 7 percent to $3.8 billion. Digital imaging products fell 9.6 percent to $2.1 billion and AV product sales fell 5.4 percent to $1.8 billion.
The company’s networked products and services business, which includes games and Vaio PCs, swung to a $211 million operating profit from a year-earlier loss on higher Vaio sales. They pushed the division’s overall revenue 1.9 percent higher to $6.6 billion. Unit sales of Vaio PCs jumped in all regions, Sony said. But unit sales of PS2 hardware fell to 2.1 million consoles from 2.5 million a year earlier, and unit sales of PSPs fell to 4.2 million from 5.1 million, it said. Sony said it sold 6.5 million PS3s compared with 4.5 million a year earlier on “the launch of a new model,” a reference to the thinner-profile PS3 that debuted in the fall and sold for $100 less than the model it replaced.
For the year ending March 31, Sony said, it now expects to report a 30-billion-yen operating loss. That’s down from a 60- billion-yen loss that Sony predicted in October, and it would be a marked improvement from the 228-billion-yen operating loss the company suffered last fiscal year. The forecast assumes that currency exchange rates hold steady at about 90 yen to the dollar, Sony said.
Sony left unchanged its October projection that the company will finish the year with a 5.6 percent overall revenue decline to 7.3 trillion yen. That’s because in consumer products and devices, sales are expected to decrease “mainly due to the continuing weakness in the business environment since the second half of the previous fiscal year as well as the impact” of the stronger yen against the dollar and the euro, Sony said. In networked products and services, sales are expected to fall not just because of the stronger yen, but also from lower PS2 hardware and software sales, it said.