twice connect
careers

Sony CE Sales Flat In Fiscal Q3; Operating Income Declines 40%

2/09/2004 02:00:00 AM Eastern

Sales of flat-panel televisions, DVD recorders and digital cameras helped Sony register break-even sales figures in its consumer electronics segment during the company's fiscal third quarter. Segment sales reached $13.8 billion in the three months, about flat with the dollar volume reported in the third quarter of last year.

However, third quarter operating income in Sony's consumer electronics segment slid nearly 40 percent, dropping to $463 million, compared with $777.2 million in the year-ago period. The company said segment-restructuring charges of $433 million, up from $80.5 million year-on-year, primarily accounted for the income decrease.

Video sales led the CE segment product parade in the third quarter, increasing nearly 17 percent, to $2.9 billion, up from $2.5 billion year-on-year. Audio sales slid 7 percent in the three months, down to $1.9 billion, from $2 billion in the same three months in 2002. Television sales were off 3.4 percent in the third quarter, reaching $2.8 billion, from $3 billion in the same quarter a year ago.

Slower sales of PlayStation2 pushed third quarter game-segment dollar volume down 4.5 percent, to $3.4 billion, from $3.6 billion in the same three months last year. Revenue decreased because of strategic price reductions on the PS 2, while the company recorded a 15 percent decline in PS 2 third quarter shipments. Software sales for PS 2 increased 32 percent in the three months.

Third quarter operating income in the game segment decreased only slightly, down 1.6 percent, to $659 million, from $678.7 million year-on-year.

When a 30 percent sales volume slide and an 82 percent operating income decrease in its Sony Pictures segment is added to results from both the CE and games segments, consolidated Sony sales in the third quarter, ended Dec. 31, remained about flat, at $21.7 billion.

Consolidated operating income, due mainly to restructuring expenses, decreased 20.4 percent in the third quarter, to $1.5 billion, from $1.9 billion year-over-year. Net income declined 26.2 percent in the period, to $866 million, from $1.2 billion in the same three months in 2002.

Sony said it plans to take a restructuring charge of $1.4 billion in the upcoming fiscal year, part of a three-year plan to improve its electronics business, the company's largest segment. The charge primarily is for job cuts and lowering fixed costs.

For the nine months, CE segment sales dropped 3.3 percent, to $35.4 billion, and the segment's operating income for the nine months decreased 37.7 percent, to $916 million. Game segment sales for the nine months were off 17 percent, to $6.1 billion and operating income for the game segment dropped 24.8 percent in the nine months, to $696 million.