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Sony Fiscal Q2 CE Sales Drop 5%

10/25/2001 01:25:00 PM Eastern

Tokyo - Reflecting downward sales of monitors, televisions and video cameras in the United States and continued falling prices, 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 a 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, primarily due to 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 television 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, said Sony.

Although Sony reported an 18.4 percent increase in overall sales to the United States 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.

Regarding profit performance by product in the second quarter, the company recorded a large loss in mobile phones. However, profit was recorded in some categories, including video cameras, digital still cameras, televisions and portable audio. Compared with the second quarter of 2000, Sony said profit performance deteriorated in such products as mobile phones and video cameras.

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. This was due primarily to further cost reductions in producing PlayStation 2 hardware and favorable sales of PlayStation 2 software. Overall sales in the United States increased significantly, due to contributions from PlayStation 2 hardware and software, said Sony.

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 second quarter of 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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