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Sony CE Biz Edges Upward 1.7%

Tokyo — Sony boosted overall all fiscal year-end sales in its consumer electronics business by 1.7 percent, climbing to $44.8 billion, compared with $44.1 billion the prior 12 months, by increasing sales of LCD televisions in all its geographic sales area as well as boosting sales of LCD rear-projection TVs in the United States.

Sony’s CE segment reported a decline in sales of CRT televisions in the year, due to the continuing shift in demand for flat-panel products, as well as lower sales for plasma TVs, where new product development has been terminated.

The CE segment recorded a lower operating loss of $268.8 million for the fiscal year, ended March 31, compared with a loss of $298.4 million the prior period. There was an increase in operating income for such products as Handycam video cameras, which experienced an increase in sales of DVD and high definition video cameras, and Vaio PCs, where Sony reported favorable sales of notebooks. Profitability decreased for tube TVS, where sales dropped, as well as for image sensors and LCD televisions, which both experienced a decline in unit selling prices, said the company.

Sales in the Sony game division jumped 31.4 percent in the 12 months, coming in at $8.2 billion, up from $6.3 billion a year earlier. The United States enjoyed a significant increase in sales due to movement of PlayStation, while sales of PlayStation2 were on a par with the previous fiscal year. PS2 software sales in the United States were relatively unchanged year-on-year.

Operating income in the game segment nosedived 79.7 percent to $75 million, from $375.8 million last year, due to the high R&D costs associated with PS3, as well as charges associated with preparation for the launch of the PS3 platform.

Looking ahead, Sony expects an increase in CE sales, primarily due to a rise in sales of LCD TVs and semiconductors, including those used in the game segment. A significant sales increase is anticipated with the debut of PS3, while a significant loss in operating performance is expected due to the worldwide launch of PS3 this coming November, despite the continued contribution from PS2 and PSP businesses, said Sony.

In the fourth quarter, Sony posted a 2.7 percent sales increase for its CE division, rising to $10.4 billion, from $10.3 billion. Operating income for CE in the fourth quarter came in at a negative $785 million, compared with a year-ago loss of $873.8 million.

Sales for the fourth quarter in the game business dropped 31.4 percent to $1.3 billion, down from $1.9 billion the prior year. Operating income for the game segment in the last quarter of the fiscal year posted a negative $525 million, significantly higher than the $12.9 million loss reported in the fourth quarter last year.

In the fourth quarter, sales of audio products edged downward 1.7 percent to $895 million, from $926.2 million a year earlier. Video sales were flat, at about $1.8 billion, while television sales climbed 15.7 percent, reaching $2.1 billion, up from $1.9 billion year-over-year.

Audio had a fourth quarter loss of $70 million, compared with a loss of $87 million the prior year. Video showed operating income of $77 million in the fourth quarter, compared with a year-on-year loss of $87.9 million. Televisions recorded a $104 million operating loss in the three months, down from a $143.5 million loss last year.

Sales in the United States in the fourth quarter dropped 15.5 percent, down to $3.8 billion, from $4.6 billion the previous year. U.S. sales for the 12 months were off 1 percent, down to $16.7 billion from a year-ago $17.2 billion.

Consolidated Sony sales for the fiscal year rose 4.4 percent, hitting $63.9 billion, up from a year-on-year $62.3 billion.

Operating income rose 67.9 percent to $1.6 billion from a year-ago $990.8 million, due mainly to investment gains and healthy sales of flat-panel TVs. However, net income dropped 24.5 percent, to $1.1 billion for the year, compared with $1.4 billion last year.

The move upward in operating income includes a one-time gain of $628 million due to transfers in the company’s pension fund. In addition, the company reported restructuring charges of $1.2 billion for the year, compared with $782.9 million the previous fiscal year.

Sony’s CE segment recorded restructuring charges of $1.1 billion for the 12 months, compared with $723.7 million a year ago.

In the fourth quarter, Sony consolidated sales increased 8.7 percent to $15.8 billion from a year-ago $14.8 billion.

The company’s fourth quarter operating loss came in at $532 million, down from a loss of $673.4 million in the same three months the prior year.

Net loss for the fourth quarter hit $578.8 million, compared with a loss of $491 million the previous year. The loss was attributed to ongoing restructuring costs and development expenses for PS3.