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Sony CE Segment Year-End Sales Flat, Reports Loss

4/27/2004 08:33:00 AM Eastern

Tokyo — Sales in the consumer electronics segment at Sony for the fiscal year edged downward by about 1 percent to $47.1 billion, due to a significant decline in inter-segment sales to the company’s game division.

Sony also reported a $339 million loss for its electronics segment in the 12 months, ended March 31, compared with a $1 billion profit the previous year, due to $651.5 million increase in restructuring expenses, the strong yen, and declining prices in CRT televisions and Clie PDAs.

While Sony reported increased sales of flat-panel televisions, cellular phones and digital cameras, sales in the company’s game segment of PlayStation2 hardware and software dropped 18.3 percent in the 12 months to $7.5 billion from a year-earlier $8.8 billion.

The game segment took an even harder hit in the 12 months, with operating income sliding 40 percent to $650 million from about $1 billion a year earlier. The drop was due to an increase in research-and-development expenses and the decrease in hardware sales, said Sony.

The video category enjoyed a 28.9 percent increase in sales in Sony’s fourth quarter, hitting $1.9 billion from $1.4 billion the previous year, from climbing sales of flat panel TVs and DVD recorders. Video also recorded $27 million in operating income in the fourth quarter, reversing a loss of $133.4 million year-on-year.

Sony’s television category recorded a fourth quarter sales increase of 5.3 percent, rising to $2.1 billion from the previous year’s $1.9 billion. However, declining prices played a large role in a 42.8 percent drop in operating income for the three months, down to $31 million from $51.5 million in 2003.

Sales in the audio category slipped 9.1 percent to $1.1 billion from $1.2 billion in the fourth quarter, as sales of portable audio dropped. Audio’s operating loss climbed to $115 million from a year-earlier loss of $30 million.

For the 12 months, video segment sales increased 11.4 percent to $9.1 billion from $7.8 billion, with operating income declining 6.3 percent to $838 million from $855.7 million.

Television sales in the 12 months declined 3.5 percent for the year, down to $8.8 billion from $8.7 billion. Operating income was off by nearly half for the 12 months to $312 million from $589.8 million.

Audio segment sales in the 12 months dropped 8.6 percent to $6 billion from $6.3 billion, while operating income decreased 7.8 percent to $403 million from $417.7 million.

Sony anticipates an overall sales increase in the CE segment for the fiscal year ending in March of 2005, as sales of flat-panel TVs, DVD recorders and digital cameras continue to rise, while CRT sales continue to drop.

Consolidated 12-month Sony sales were flat at $72.1 billion, but restructuring costs and the strong yen led to a 23.4 percent drop in net income to $851 million from about $1.1 billion. Income declines in the electronics and game segments were partially offset by improved results at Sony’s financial and music divisions.

Sony expects about a 1 percent rise in consolidated sales for the current fiscal year, with net income climbing 13 percent to $920 million.