Sony Q3 op profit falls 20%, full-year forecast up
TOKYO, Jan 28 (Reuters) - Electronics and entertainment group Sony Corp said on Wednesday its quarterly operating profit fell 20 percent due to a slowdown in PlayStation 2 (PS2) console sales and a slump in box office returns for its movies.
Wednesday January 28, 2:32 PM
But Sony lifted its net profit estimate for the business year to March 31 to 55 billion yen ($521 million) from 50 billion yen because a strong euro is helping yen-denominated profits.
In the third quarter, losses at its game and movie divisions overshadowed improved demand for Sony's digital audio-video (AV) products, boosted by the release of a line-up of DVD/hard disk drive (HDD) recorders and strong sales of LCD projection TVs in the U.S. market.
Its earnings compared poorly with what are expected to be rising profits from rivals Sharp Corp and Panasonic maker Matsushita Electric Industrial Co Ltd thanks to demand for flat-panel TVs and DVD recorders.
Sony's reputation in the consumer electronics industry was tarnished when it posted a surprise $1-billion, January-March loss last year, but expectations of strong holiday sales had prompted some analysts to upgrade its prospects in recent weeks.
Tokyo-based Sony posted an operating profit of 158.8 billion yen ($1.50 billion) for the three months to December 31 versus analysts' consensus estimate of 130.5 billion yen and a record profit of 199.5 billion yen in the year-ago period.
On a net basis, quarterly profit fell 26 percent from a year earlier to 92.6 billion yen and sales rose 0.7 percent to a record 2.32 trillion yen.
Sony left its operating profit forecast unchanged at 100 billion yen for the business year to March 31 as it decided to lift its full-year restructuring expense to 150 billion yen from 140 billion yen.
Profits and sales at Sony's game division were depressed by a drop in PS2 shipments in the U.S. market, offsetting strong software sales, and its movie division could not match last year's hit releases such as "Spiderman" and "Men in Black 2". In the latest quarter, Sony booked a 53.6 billion yen restructuring expense -- mostly in its electronics divisions -- which pushed down operating profit.
It has already booked 46 percent of 140 billion yen in restructuring charges earmarked for this business year to March 31. The remaining 80.2 billion yen is expected to be booked in the current quarter.
The write-off is a reminder of the surprise January-March loss last year from mounting inventory at its electronics division, which triggered a sharp sell-off in its shares in late April and came to be known as the "Sony shock".
Sony shares have rallied almost 60 percent since then and expectations of strong holiday sales have pushed the stock up about 12 percent in the last three months, compared to a five percent rise in Tokyo's electric machinery sub-index .
Shares in Sony closed down 0.23 percent at 4,320 yen on Wednesday before the earnings announcement, versus a 0.69 percent fall in the Nikkei 225 average . ($1=105.59 Yen) |
