Tokyo - Sony reported lower sales in its fiscal third quarter as well as lower net profit due foreign exchange rates and, in the case of consumer products, LCD TV competition.
Sales for the quarter, ended Dec. 31, 2010, were 2,206.2 billion yen (or $27.2 billion), a decrease of 1.4 percent year on year.
Net income attributable to Sony's stockholders was 72.08 billion yen, down 8.6 percent year on year.
In its consumer, professional and devices segment, sales increased 4.2 percent year on year (a 13 percent increase on a local currency basis) to 1,090.9 billion yen ($13.5 billion) Sales to outside customers increased 7.7 percent year on year. This was primarily due to higher LCD television sales resulting from increased unit sales, higher semiconductor sales resulting from increased small- and medium-sized LCD panel sales, and higher interchangeable-single-lens camera sales resulting from increased unit sales, partially offset by lower component sales resulting from a decrease in PC component sales.
But operating income decreased 24 billion yen year on year to 26.8 billion yen ($331.0 billion), a 47.2 percent drop in yen, due in part to LCD TVs. This was driven by an increase in selling, general and administrative expenses primarily associated with higher sales, unfavorable foreign exchange rates, a deterioration of the cost of sales ratio, and an increase in restructuring charges. These factors were partially offset by an increase in gross profit due to higher sales.
Categories that unfavorably impacted the change in segment operating results (excluding restructuring charges) include LCD televisions, reflecting a decline in unit selling prices despite rising unit sales, and compact digital cameras due to lower unit selling prices and unfavorable foreign exchange rates.
In its networked products segment, which includes PlayStation and Vaio PCs, sales decreased 6.4 percent year on year (a 3 percent increase on a local currency basis) to 566.6 billion yen ($6.9 billion).
Operating income increased 26.3 billion yen year on year to 45.7 billion yen ($564 million). This was mainly due to a significant improvement in the cost of sales ratio coupled with an increase in gross profit from higher sales, partially offset by unfavorable foreign exchange rates.
The game business benefited from significant cost reductions of PlayStation3 (PS3) hardware and higher unit sales of PS3 software, which favorably impacted the change in segment operating results (excluding restructuring charges).
Its cellphone subsidiary,
, reported its financials for the quarter in which it had lower sales but posted a profit, in January.