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Sony Reports Q2 Net Drop Of 72%

11/03/2008 02:00:00 AM Eastern

Sony reported its fiscal second-quarter net income was off 72 percent due to the sagging world economy and the strong value of the yen.

While Sony warned two weeks ago its fiscal year earnings forecast would be off, the 72 percent drop to $200 million was a surprise for the quarter, ended Sept. 30.

Sales and operating revenue for the quarter were $19.9 billion, down 0.5 percent, while operating income was down 90.1 percent to $106 million.

By business segment, electronics sales were down 0.6 percent to $15.9 billion, and operating income slumped 40.5 percent to $727 million. Sales were down despite higher sales of Bravia LCD TVs, Vaio PCs and the A series d-SLR cameras. But this was offset by the appreciation of the yen vs. the U.S. dollar, Sony reported.

Operating income in electronics during the quarter was down due to a decline in unit selling prices and a decrease in equity in net income for Sony Ericsson. And while profitability increased for Bravia LCD TVs, profits were hurt in Cyber-shot compact digital cameras due to lower unit sales and price declines, and Vaio PCs, which also suffered from lower prices.

In Sony's game segment, sales and operating revenue were up 10.3 percent to $2.58 billion but the operating loss of $379 million was an improvement over the previous year's loss.

Sales of PlayStation3 hardware were 2.43 million units worldwide, an increase of 1.12 million, while PSP hardware sales were up 600,000 units to 3.18 million. PS2 sales were down 780 million to 2.5 million units.

Due to major drop in PS2 sales Sony reported that software sales for all its game platforms were down in the quarter. PS2 software sales were down 14.9 million and PSP were off 800,000, but PS3 was up 10.7 million.

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