Sony Profits Up 25%, Forecast Cut

By Greg Tarr -- TWICE, 1/31/2008 8:29:00 AM

Tokyo — Sony reported Thursday that its net profit rose by more than 25 percent in its third quarter, ended Dec. 31, behind strong sales of televisions and video games.

Net income in the period rose to $1.88 billion, the company said, while sales and operating revenue advanced 9.6 percent to $26.87 billion, but operating profits fell 7 percent behind the effects of a stronger yen and eroded margins from heavy price competition.

Sony also said it has reduced its full-year (ending March 31) operating profit forecast to $3.85 billion, less than the 5 percent margin the company had targeted.

Sony said that strong product category sales in the period came from Bravia LCD TVs, Vaio PCs and Cyber-shot digital still cameras, while weak segments included projection TVs and cellphones.

Overall, the electronics division saw a 10.2 percent jump in sales to almost $19 million but profits fell 8 percent.

In the gaming division sales rose 31 percent to lift the unit back to profitability, but the results were still behind expectations. The company said PlayStation3 sales hit a record 4.9 million unit sales, helped by the launch of the newest version of the console and a hardware price cut, but the results were weaker than hoped.

As a result, Sony cut its PS3 sales estimate for the year from 11 million units, to 9.5 million units.

Sales of the PlayStation Portable also saw a record 5.8 million units in the period, causing Sony to raise its full-year sales forecast from 10 million to 13 million units. Sales of PlayStation2 consoles also had a strong quarter, helped by lower price, causing the company to reset its full-year forecast by 1 million units, to 13 million consoles.