Sony’s Quarterly Report Reveals Gains In TVs and Cameras
Music Players Still Have A Long Way To Go
Sony revealed a better-than-expected quarterly operating profit, driven by increased sales of its Cybershot digital cameras and Bravia brand LCD televisions. The earnings display a major improvement in the profitability of Sony’s electronics division, a sign that its recovery is on track.
The TV-led turnaround at its electronics unit is symbolic as its president, Ryoji Chubachi, has said that there would be no Sony revival without a TV revival. Sony saw its liquid crystal display (LCD) TV sales soar fivefold from April through June compared to the same period last year. A weaker yen also helped the electronics and entertainment conglomerate overcome valuation losses at its life insurance unit and start-up costs for its PlayStation 3 game console.
Sony earned an operating profit of ¥27.05 billion ($232.5 million) in April-June, topping a consensus forecast of ¥18 billion ($153 million) and swinging from a ¥6.58 billion ($55.9 million) loss a year earlier. Net profit totaled ¥32.29 billion ($274.4 million), in a turnaround from a ¥7.26 billion loss a year earlier, which got a nice boost from its mobile phone joint venture with Ericsson.
Sony’s electronics division, which accounts for about 70 percent of its total revenues and is the public barometer of the company’s health, posted a ¥47.4 billion ($402.9 million) profit, its first profit for the April-June quarter in two years.
Sony will launch PlayStation 3, the latest version of its blockbuster game machine, in November. It will compete for holiday buyers’ attention with Nintendo’s upcoming Wii and Microsoft’s Xbox 360 in the nearly $30 billion video game market. For the full year to next March, Sony revised up its operating profit forecast by 30 percent to 130 billion yen ($1.1 billion) as it started booking patent-related income as recurring revenue rather than miscellaneous income. It kept unchanged its net profit forecast of ¥130 billion yen.
The Future: Sony really needs to step up their music player market to be perceived as being truly on the road to recovery. The Walkman sub-brand has withered on the vine since the debut of the iPod and Sony has failed to launch a comprehensive strategy to get back on top. The company really needs to hunker down and reinvent the market.