Sony Posts Fiscal Q1 Lower Sales, Loss

By TWICE Staff -- TWICE, 7/28/2011

Tokyo - Sony reported lower sales and a loss in its fiscal first quarter due to the Japanese earthquake and tsunami and a "deterioration of the electronics business environment."

Sales were $18.5 billion, a decrease of 10 percent vs. the prior year's opening quarter due, in part, to sales decreases in consumer products, the earthquake and unfavorable exchange rates.

During the quarter ended June 30, the average rates of the yen were 80.7 yen against the U.S. dollar and 115.9 yen against the euro, which was 12.7 percent higher and 0.4 percent lower, respectively, than the previous fiscal year's first quarter.

Net loss attributable to Sony stockholders was 15.5 billion yen ($191 million). That is compared with net income of 25.7 billion yen in the same quarter of the previous fiscal year.

Operating income decreased 39.5 billion yen year on year to 27.5 billion yen ($340 million).

Sony reported that supply-chain and production-capacity issues due to the aftereffects of the Japanese earthquake "is progressing faster than [expected]."

Due to the cyber attacks on Sony's network services for PlayStation Network, Qriocity and Sony Online

Entertainment, the network services were temporarily shut down and related expenses such as security enhancement measures were recorded in the current quarter. The network services that were shut down in April were restored in phases beginning in May, culminating in a full restoration on July 6 in all countries and regions where Sony provides the network services. Most recently, user logins to PlayStation Network in North America have returned to a similar level as before the cyber attacks.

In its consumer products and services segment, sales decreased 17.9 percent year on year (a 13 percent decrease on a local currency basis) to 732.3 billion yen ($9.04 billion). This was primarily due to a decrease in LCD television revenue reflecting price declines resulting mainly from a deterioration in market conditions in the U.S. and Europe, and lower PC revenue reflecting price competition.

Operating income decreased 26.9 billion yen year-on-year to 1.7 billion yen ($21 million). This was driven primarily by a decrease in gross profit due to lower sales and deterioration in the cost of sales ratio. These factors were partially offset by a decrease in selling, general and administrative expenses, the company said.

Categories contributing to the deterioration in operating results (excluding restructuring charges) include LCD television, reflecting the

price declines mentioned above, and video cameras, reflecting a decrease in unit sales due to market contraction, Sony said.