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Wednesday July 28, 1:08 pm ET
By Yuri Kageyama, AP Business Writer
Sony's Profit Soars in Latest Quarter on Improved Results From Joint Venture Sony Ericsson
TOKYO (AP) -- Sony Corp.'s profit surged as improved results from its cell-phone joint venture Sony Ericsson and other businesses in which it has an investment stake more than offset weaker operating results from its electronics and video-games businesses which saw shipments of its PlayStation 2 machines tumble.
The Japanese electronics and entertainment giant said Wednesday its profit totaled 23.3 billion yen ($210 million) for the April-June period, up from 1.1 billion yen the same period the previous year.
Sales inched up 0.5 percent to 1.61 trillion yen ($14.5 billion) from 1.60 trillion yen a year ago.
Sony said the profits for the latest quarter were better than it had expected but maintained its forecast for the full year, saying it wished to be cautious about the future.
Sony expects to earn 100 billion yen ($901 million) for the fiscal year ending March 31, 2005, up 13 percent from the previous year on 7.55 trillion yen ($68 billion) sales, up 1 percent from fiscal 2003.
Chief executive Nobuyuki Idei said this fiscal year is important for Sony in strengthening its foundation for long-term growth.
The company is releasing new products such as the PlayStation Portable handheld video game machine, investing in computer chips and liquid crystal displays and expanding its music business through a joint venture with Bertelsmann AG, he said.
"Sony will be a company that works together as a group for the realization of ever more enhanced profitability," Idei said in a statement.
The latest results reflected a gain related to its equity stake in the profits of affiliated companies compared to an equity loss the previous year. Sony Ericsson significantly improved its results and contributed 5.8 billion yen ($52.3 million) to Sony's results.
Sony also booked a 12.8 billion yen ($115 million) gain as a subsidiary recognized proceeds from a license agreement with Microsoft Corp. related to a settlement of a patent-related lawsuit, the company said.
But operating income declined nearly 50 percent in Sony's electronics segment to 6.9 billion yen ($62 million) from 13.8 billion yen a year ago, largely because of a stronger yen and restructuring costs.
In recent years, Sony has suffered from growing competition from cheaper U.S. and Asian rivals that have chipped away at its previous domination in electronics.
Sales plunged in traditional TVs and portable-audio equipment while sales were solid in digital cameras and flat-panel televisions. Sales in the electronics segment totaled 1.098 trillion yen ($9.9 billion), down 0.2 percent from 1.100 trillion yen a year ago.
Sony plans to spend 130 billion yen ($1.2 billion) on restructuring this fiscal year after spending 168 billion yen the previous year.
Sony's video-game business, once its most profitable sector, sank to an operating loss of 2.9 billion yen ($26 million), in contrast to a profit of 1.8 billion yen a year ago.
Game business sales shrank about 16 percent to 105 billion yen ($946 million) from 125 billion yen on slowing sales of the PlayStation 2 video-game machine. Sony shipped just 710,000 PlayStation 2 machines for the quarter, a decrease of nearly 2 million machines from a year ago.
Sony Music Entertainment, the company's music unit, recorded a 1.5 percent growth in sales at 118.8 billion yen ($1.1 billion) from 117 billion yen a year ago, driven by key releases such as Prince's "Musicology" and country-music singer Gretchen Wilson's debut album "Here for the Party."
Operating losses in the music segment were trimmed to 1.1 billion yen ($9.9 million) from a loss of 6 billion yen a year ago. Sony has obtained approval from the European Union on its joint venture with Bertelsmann. Approval in the United States is still pending.
The June 30 release of the successful "Spider-Man 2" was already contributing to Sony's movie division, the company said. But sales dipped 1.9 percent to 148 billion yen ($1.3 billion) from 151 billion yen a year ago.
Better home video and DVD revenue, such as "50 First Dates" and "Big Fish," as well as relatively successful theater releases, including "Hellboy" and "13 Going on 30," helped Sony Pictures return to profitability at 4.1 billion yen ($37 million) for the quarter, a reversal from a 2.4 billion yen loss a year ago.
By Yuri Kageyama, AP Business Writer
Sony's Profit Soars in Latest Quarter on Improved Results From Joint Venture Sony Ericsson
TOKYO (AP) -- Sony Corp.'s profit surged as improved results from its cell-phone joint venture Sony Ericsson and other businesses in which it has an investment stake more than offset weaker operating results from its electronics and video-games businesses which saw shipments of its PlayStation 2 machines tumble.
The Japanese electronics and entertainment giant said Wednesday its profit totaled 23.3 billion yen ($210 million) for the April-June period, up from 1.1 billion yen the same period the previous year.
Sales inched up 0.5 percent to 1.61 trillion yen ($14.5 billion) from 1.60 trillion yen a year ago.
Sony said the profits for the latest quarter were better than it had expected but maintained its forecast for the full year, saying it wished to be cautious about the future.
Sony expects to earn 100 billion yen ($901 million) for the fiscal year ending March 31, 2005, up 13 percent from the previous year on 7.55 trillion yen ($68 billion) sales, up 1 percent from fiscal 2003.
Chief executive Nobuyuki Idei said this fiscal year is important for Sony in strengthening its foundation for long-term growth.
The company is releasing new products such as the PlayStation Portable handheld video game machine, investing in computer chips and liquid crystal displays and expanding its music business through a joint venture with Bertelsmann AG, he said.
"Sony will be a company that works together as a group for the realization of ever more enhanced profitability," Idei said in a statement.
The latest results reflected a gain related to its equity stake in the profits of affiliated companies compared to an equity loss the previous year. Sony Ericsson significantly improved its results and contributed 5.8 billion yen ($52.3 million) to Sony's results.
Sony also booked a 12.8 billion yen ($115 million) gain as a subsidiary recognized proceeds from a license agreement with Microsoft Corp. related to a settlement of a patent-related lawsuit, the company said.
But operating income declined nearly 50 percent in Sony's electronics segment to 6.9 billion yen ($62 million) from 13.8 billion yen a year ago, largely because of a stronger yen and restructuring costs.
In recent years, Sony has suffered from growing competition from cheaper U.S. and Asian rivals that have chipped away at its previous domination in electronics.
Sales plunged in traditional TVs and portable-audio equipment while sales were solid in digital cameras and flat-panel televisions. Sales in the electronics segment totaled 1.098 trillion yen ($9.9 billion), down 0.2 percent from 1.100 trillion yen a year ago.
Sony plans to spend 130 billion yen ($1.2 billion) on restructuring this fiscal year after spending 168 billion yen the previous year.
Sony's video-game business, once its most profitable sector, sank to an operating loss of 2.9 billion yen ($26 million), in contrast to a profit of 1.8 billion yen a year ago.
Game business sales shrank about 16 percent to 105 billion yen ($946 million) from 125 billion yen on slowing sales of the PlayStation 2 video-game machine. Sony shipped just 710,000 PlayStation 2 machines for the quarter, a decrease of nearly 2 million machines from a year ago.
Sony Music Entertainment, the company's music unit, recorded a 1.5 percent growth in sales at 118.8 billion yen ($1.1 billion) from 117 billion yen a year ago, driven by key releases such as Prince's "Musicology" and country-music singer Gretchen Wilson's debut album "Here for the Party."
Operating losses in the music segment were trimmed to 1.1 billion yen ($9.9 million) from a loss of 6 billion yen a year ago. Sony has obtained approval from the European Union on its joint venture with Bertelsmann. Approval in the United States is still pending.
The June 30 release of the successful "Spider-Man 2" was already contributing to Sony's movie division, the company said. But sales dipped 1.9 percent to 148 billion yen ($1.3 billion) from 151 billion yen a year ago.
Better home video and DVD revenue, such as "50 First Dates" and "Big Fish," as well as relatively successful theater releases, including "Hellboy" and "13 Going on 30," helped Sony Pictures return to profitability at 4.1 billion yen ($37 million) for the quarter, a reversal from a 2.4 billion yen loss a year ago.
