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Sony’s Fiscal Q3 Net Income Down 95%

1/29/2009 10:25:00 AM Eastern

Tokyo — Sony reported a net income decrease of 94.8 percent to $114 million in is fiscal third quarter, ended Dec. 31, and said again it would likely post its first net loss in 14 years for the fiscal year.

Consolidated sales decreased 24.6 percent year on year to $23.8 billion.

Sony blamed its woes on factors that are affecting most publicly held companies worldwide, and especially in Japan that rely on exports: the global economic slowdown, the appreciation of the yen against the U.S. dollar and the euro, and increased price competition.

The disappointing performance was expected, since Sony already warned earlier this month that it would likely post a net loss for the fiscal year ending March 31.

In electronics, sales decreased 29.3 percent year on year to $16.1 billion due to the appreciation of the yen against the U.S. dollar and the euro, and it reported an operating loss of $175 million.

Sony reported increased unit sales for Blu-ray players, but lower sales for products such as Cyber-shot digital cameras, Handycam video cameras and Vaio PCs. The operating loss was blamed on Sony Ericsson’s performance, and a decline in income for Bravia LCD TVs, Vaio PCs and Cyber-shot cameras.

In games, sales were down 32 percent to $4.3 billion, with operating income down 97 percent to $4 million. Overall hardware sales were down as a result of the impact of the yen appreciation, and a decrease in sales of the PlayStation2, PlayStation Portable and PlayStation3. The latter game platform’s software sales were up during the quarter, but overall game software sales were down.

Sony is still projecting a 13 percent drop in fiscal year sales and a 150 billion yen loss. That loss is compared with a 369.4 billion yen profit during the previous fiscal year.

Separately, Sony and Sharp both announced it has postponed the establishment of a joint venture to produce large-sized LCD panels and LCD modules until March 2010, one year later than scheduled, due to the economy. Both companies said they would continue to negotiate and have set a target date of June 30, 2009, to enter into a definitive agreement to establish a joint venture.