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Sony Reports Flat Q2 Sales

Tokyo – Sony Thursday reported a narrower second-quarter net loss of $194 million (15.5 billion yen), as the Japanese consumer electronics firm continues to feel the weight of a depressed TV market.

The company, which reported a 27 billion yen loss in the same July through September period last year, stuck by its full-year $1.63 billion (130 billion yen) operating profit forecast, but lowered its sales outlook to 6.6 trillion yen from an estimated 6.8 trillion.

Sony said its operating income reached $379 million (30.3 billion yen) for the quarter, compared with an operating loss of 1.6 billion yen last year.

“The operating environment for Sony continued to be severe primarily due to a slowing of the global economy,” Sony said in the statement.

Weakened by a slump in global television purchases against the rising value of the yen, Sony is in the midst of a major restructuring under chief executive Kazuo Hirai. It reduced television operations by selling off interests in production plants and has focused more resources on its smartphone, imaging, video game and medical businesses.

Sony said operating results improved in the devices and home entertainment and sound (HE&S) segments as a result, in part, of cost reductions in the LCD TV business.

In the period, restructuring charges decreased 17.3 billion yen year on year to 11.5 billion yen. The company also reported 13.2 billion yen from insurance recoveries related to Thailand floods and a gain of 8.2 billion yen from the sale of its chemical business unit.

Sony said sales and operating revenue rose 1.9 percent to $19.9 billion (1.6 trillion yen), from 1.57 trillion yen in the previous year.

“The operating environment for Sony continued to be severe primarily due to a slowing of the global economy,” Sony said in the statement.

The imaging products and solutions (IP&S) segment saw operating income decline 84 percent to 2.6 billion yen, while sales dropped 16.7 percent to 182.6 billion yen, as point-and-shoot camera sales continued to be impacted by smartphone sales.

It cut its digital camera sales prediction for the year to 16 million.

Game sales decreased 15.8 percent from a year ago to 148.2 billion yen due to lower sales of hardware and software of the PlayStation3 and PlayStation Portable (PSP). Operating income for the unit decreased 24 percent.

Sony cut its forecast for full-year sales of its hand-held PSP and Vita game consoles to 10 million from a previous forecast of 12 million, but kept its prediction for PlayStation home console sales at 16 million.

The mobile products and communications (MP&C) segment saw sales surged 112 percent to 300.4 billion yen, following the consolidation of Sony Mobile, which along with slower PC sales led to a wider operating.

In HE&S, sales fell 25 percent, but operating loss narrowed, amid a decrease in LCD television unit sales.

The operating loss in the home entertainment unit, including TV operations, shrank to 15.8 billion yen in the quarter from 41.8 billion yen a year earlier, Sony said in the statement.

Television sales decreased 31.5 percent from a year ago to 146.7 billion yen.

Sony lowered its estimate for TV set sales for the year to 14.5 million from 15.5 million.

The company’s TV business is expected to post a ninth consecutive loss this year, but a Sony executive said this week the unit is expected to turn profitable next fiscal year.

Sony said devices sales decreased 16.6 percent to 249.9 billion yen with the absence of the small- and medium-sized display business, but the segment turned in an operating profit compared to a loss last year.

Sales and operating profit declined in Sony Pictures. Music sales fell, but operating income increased due to lower restructuring charges and improvement in the recorded music business in the U.S. and Europe.