Sony Reports Profit Fell 5% In Fiscal Q3
By Staff -- TWICE, 2/12/2007
TOKYO — Sony's quarterly profit fell 5 percent as costs for launching its PlayStation3 video game console offset a recovery in its consumer electronics business.
Group net profit at Sony in its fiscal third quarter, ending Dec. 31, 2006, slipped to $1.3 billion from $1.4 billion the same period a year earlier, and quarterly sales jumped 9.8 percent to $21.4 billion. Its electronics unit reported record sales for the quarter and an operating profit of $1.5 million, double from a year ago.
This past quarter, Sony said, saw its game division dragging on earnings the most. Sony Computer Entertainment, the gaming unit, posted a $443 million operating loss, largely on startup costs for the PlayStation3.
Sony said it shipped 1.84 million PS3 machines worldwide during the quarter; the company stuck to its earlier target of shipping 6 million PS3 consoles by the end of the fiscal year.
Declining sales during the October-December period of the PlayStation2, and of the handheld PlayStation Portable, including PSP game software, also pushed down profits at its gaming unit, the company said.
Sony blamed its own price-slashing strategy for the PS3 as cutting into profits — the company lowered the price on the machine in Japan by about 20 percent before the PS3 went on sale.
Sony also got a $328 million boost toward profits from a weak yen and $276 million from its investment in London-based Sony Ericsson, a mobile phone joint venture with Sweden's LM Ericsson, it said.
For the first nine months of the fiscal year, Sony recorded a $1.6 billion profit, up 2 percent from $1.56 billion a year earlier, on $50.9 billion sales, up 9.7 percent from $46.8 billion.
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