Sony Posts Q1 Double-Digit Income Drop

By Steve Smith On Aug 4 2008 - 6:00am

Sony reported double-digit decreases in operating and net income and flat sales for its fiscal first quarter due in part to price competition in cellphones and digital cameras.

For the first quarter, ended June 30, sales were flat at $18.7 billion, with operating income down 39.5 percent to $693 million and net income down 47.4 percent to $330 million. Sony added that the higher value of the yen vs. the U.S. dollar also took its toll.

In its electronics business segment, Sony reported sales and operating revenue of $13.6 billion, up 0.7 percent, while operating income was down 57.2 percent to $418 million.

Sales of Bravia LCD TVs, which increased worldwide, partially offset the negative impact from the appreciation of the yen against the U.S. dollar.

Operating income took a hit due to increased price competition faced by Sony Ericsson in cellphones and in its Cyber-shot digital cameras and Handycam camcorders. Vaio PC sales also slowed during the quarter.

In its games segment, sales were up 16.8 percent to $2.17 billion and operating income of $51 million vs. a loss for the same quarter last year. The segment posted a profit during the quarter due to an improvement in the PlayStation3's operating performance as a result of hardware cost reductions and increased sales of PS3 software and hardware.

Sony is projecting a 17 percent lower net profit for the fiscal year that ends March 31, 2009, but a 2 percent gain in sales.

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