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Sony CE Sales Drop 5% In Q2

11/05/2001 02:00:00 AM Eastern

Reflecting downward sales of displays, televisions and video cameras in the United States and continuously falling product prices from intensified competition in its major markets, Sony reported both a drop in CE sales and significant deterioration in its electronics segment profit performance during its fiscal second quarter.

Sales of CE products decreased 4.9 percent in the three months ending Sept. 30, reaching $9.7 billion, down from $10.1 billion in the year-ago period. The electronics segment posted a $209 million operating loss in the second quarter, compared with an operating income of $582 million in the same quarter in 2000.

Audio sales climbed 4.6 percent in the second three months, hitting $1.6 billion, compared with $1.5 billion in the same quarter last year. Sony attributed the increase primarily to increased sales of portable audio.

Video sales for the second quarter, affected by lower sales of video cameras, dropped 3.7 percent to $1.69 billion, down from $1.74 billion in the year-ago three months.

Sales of televisions fared even worse in the second quarter, decreasing 5.9 percent, to $1.40 billion, compared with $1.47 billion in the same period in 2000. The decrease was primarily due to lower sales of CRT-based televisions, Sony said.

Although Sony reported an 18.4 percent increase in overall sales to the U.S. in the second three months, the $5.2 billion figure includes games, music, pictures and financial services — in addition to CE products, its largest segment.

Sales in Sony's game segment jumped nearly 100 percent in the second quarter, reaching just over $2 billion. The game segment played its way back into the black in the second quarter, generating operating income of $34 million, compared with a loss of about $25 million in the year-ago period. Sony credited further cost reductions in producing PlayStation 2 hardware and favorable sales of PlayStation 2 software. Overall U.S. sales increased significantly, due to contributions from PlayStation 2 hardware and software.

For the six months, sales at Sony's CE segment dropped 3.2 percent to $18.7 billion, compared with sales of $19.1 billion in the same six months in 2000. The segment reported an operating loss for the six months of $216 million, compared with operating income of about $1 billion in the same period last year.

Battered by the weakening global economy, Sony overall recorded a consolidated net loss of $111 million in the second quarter, compared with income of $156 million in the same quarter last year.

Sony maintained its forecast for full fiscal year sales ending March 31, 2002. The company anticipates overall sales of $62.5 billion, up 3 percent from the previous fiscal year, and net income of about $84 million, down 40 percent from the prior year.

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