Sony returns to profit in fourth quarter
AP Business Writer
Sony reported a 29 billion yen ($277 million) profit for the January-March quarter on Wednesday, marking a reversal from a year ago on losses trimmed from its struggling PlayStation 3 video game business.
Sony Corp., which also has a sprawling entertainment business, including a Hollywood studio, had racked up a 67.6 billion yen loss during the same period the previous year.
The Tokyo-based manufacturer of the Walkman portable music player said Wednesday that it expects profits in coming months to dwindle because of a strengthening yen, which batters the earnings of Japanese exporters such as Sony.
Sales were solid in liquid-crystal display TVs, digital cameras and Vaio computers, the Tokyo-based manufacturer said. But sales of mobile phones, old-style picture tube TVs and PlayStation 2 machines declined during the fiscal fourth quarter, which ended March 31.
Quarterly sales dropped 6.5 percent to 1.95 trillion yen ($18.6 billion), Sony said.
Sony's latest results underline a steady recovery on the reduction of losses in its PlayStation 3 business and the sale of assets, including its former headquarters in Tokyo.
The PlayStation 3, which went on sale in late 2006, required enormous startup costs and has yet to post a profit as a business for Sony. It has also lagged behind rival Wii console from Nintendo Co.
Sony said it sold 9.24 million PlayStation 3 machines in the fiscal year ended March 31, and expects to sell 10 million PS3 consoles in the fiscal year through March 2009.
Sony's bottom line for the fiscal year just ended was also helped by the absence of expenses for a massive battery recall that hit the previous year.
In the previous year, Sony recalled millions of lithium-ion laptop batteries suspected of defects that caused them to burst into flames in some cases.
For the fiscal year ended March 31, Sony posted a better-than-expected profit of 369.4 billion yen ($3.5 billion yen), a record for Sony and nearly three times the 126 billion yen profit earned in the previous fiscal year.
For the fiscal year through March 2009, Sony expects profit to slide 21.5 percent to 290 billion yen ($2.8 billion). It expects sales to edge up 1 percent to 9 trillion yen ($86 billion).
Unfavorable currency swings are expected to hurt Sony's earnings for the current fiscal year, the company said.
Sony said it is expecting the dollar to trade around 100 yen for the fiscal year. The dollar, which traded at an average of about 114 yen last year, fell below 100 yen earlier this year and is now trading near 105 yen.
Sony's profitability in its core electronics sector improved in the fiscal year ended March. Sales in its movies unit declined 11 percent because fewer films were released compared with the previous year.
Releases for the fiscal year just ended that contributed to theater and home entertainment revenue included "Spider-Man 3" and "Superbad," according to Sony.
Sony's music business in Japan also fared better compared with a year ago, boosted by best-selling albums. Sony's results reflected its equity holdings in major joint ventures, such as Sony BMG Music Entertainment, which saw success with Avril Lavigne's "The Best Damn Thing" and Alicia Keys' "As I Am" hit albums.
But equity-related income declined on year from Sony Ericsson Mobile Communications AB because of greater research and development costs, it said.
Sony shares rose 1.3 percent to close at 4,850 yen ($46) on Wednesday. The earnings were announced shortly after the close.
Copyright © 2008 The Seattle Times Company
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