Tokyo – Blaming a 6.5 percent decrease in consumer electronics sales for its fiscal year mainly on a decline in sales of Aiwa products and VAIO personal computers, Sony recorded total CE sales for the 12 months of $41.2 billion, down from $44 billion in the year-ago period.
However, the benefits of restructuring initiatives and the contribution to profitability of digital still cameras and projection TVs, helped Sony’s CE segment move solidly into the black for the year. Operating income hit $345 million for the 12 months, ended March 31, compared with a loss of $9.6 million the previous year.
Although audio sales for the 12 months dropped 8.7 percent, to $5.7 billion, down from $6.2 billion the previous year, video and televisions stayed in the positive column. Video sales for the year climbed 2.1 percent, reaching $6.9 billion, up from $6.7 billion in the year-ago period, mainly due to a significant increase in digital still camera sales. Television sales edged up 0.4 percent in the 12 months, to $7.1 billion, from $7 billion a year earlier, thanks to rising demand for large-screen sets.
For the fiscal fourth quarter, all three CE categories produced negative results. Audio sales dropped 10 percent, to $1.1 billion, from $1.2 billion in the same three months last year. Video slid 6.7 percent, down to $1.2 billion, compared with $1.3 billion the previous year. Televisions were off a whopping 18.3 percent in the fourth quarter, coming in at $1.5 billion, down from $1.8 billion year-on-year.
Sales to the United States for the year took it on the chin in Sony’s, down 2.3 percent, to $20 billion, from $20.5 billion the previous year. Operating revenue for the United States declined 16.3 percent over the year, to $4 billion, from $4.8 billion a year earlier.
Sony’s game segment recorded a 4.9 percent decrease in sales during the 12 months, down to $8 billion, from a year-earlier $8.4 billion. The company blamed the drop on strategic price reductions of PlayStation 2 hardware.
Dollar volume in PlayStation 2 hardware to the United States decreased during the year, while unit sales increased. Both dollar volume and unit sales of software increased to the United States.
Overall game segment operating income for the 12 months jumped 35.9 percent, to $939 million, up from $689.3 million in the year-ago period.
Strong worldwide performance of Sony’s movies during the past fiscal year helped the company’s film segment gain 26.3 percent in revenue for the 12 months, up to $6.7 billion, from $5.3 billion the previous year. Operating income for the segment hit $491 million in the 12 months, an 88.6 percent increase over the $260.2 million reported in the year-ago period.
Sony’s music segment did not make as strong an overall contribution to consolidated Sony sales, coming in with flat, to slightly lower, revenue for the 12 months, at $5.30 billion, a 1 percent drop from the $5.34 billion registered the previous year. The segment posted an operating loss for the year, down to a negative $72 million, compared with income of $168 million a year earlier.
Sony’s consolidated sales took a 12.2 percent hit in the fourth quarter, due mainly to a decrease in CRT televisions and VAIO PCs, sliding to $13.8 billion, from $17.7 billion in the same three months a year earlier. Sales in the game business for the fourth quarter decreased, due to a drop in hardware revenue caused, in part, by strategic price reductions.
Consolidated net income extended a loss for the fourth quarter, to a negative $926 million, compared with a loss of $45.4 million in the same period the previous year.
A consolidated sales decrease of 1.4 percent for the year, down to $62.3 billion, from a year-earlier $63 billion, was attributed to a 4.8 percent decrease in CE sales to external customers and a 5.1 percent drop in the game business.
Both CE and games were heavy contributors to Sony’s dramatic rise in consolidated earnings for the 12 months. Operating income soared 37.7 percent, hitting $1.5 billion for the year, up from $1.1 billion the previous year. Consolidated net income enjoyed a dramatic increase, to $963 million for the year, up from $127.2 million in the preceding 12-month period.
In its outlook for the fiscal year ending March 31, 2004, Sony anticipates increasing sales of plasma and LCD televisions, digital still cameras, CLIEs and other products. However, it expects CE segment sales to decrease, due to a drop in inter-segment sales to the game business and the net effect of foreign exchange rates. CE operating income also is expected to decline due to increased restructuring expenses.
Although strong sales of software for PlayStation2 will continue in the current year, Sony expects game segment sales to decrease. The company has set a cautious forecast of 20 million units of PlayStation 2 hardware shipments due to contraction of the global economy. Segment profitability will be positively influenced by growth of PlayStation 2 software sales.
The overall business outlook for the current fiscal year anticipates Sony sales of $61.5 billion, down 1 percent from the fiscal year just ended. Operating income is expected to decline 30 percent, to $1.1 billion, during the period, while net income should slide 57 percent, to $415.7 million in the current year. Sony said it will increase its capital expenditures for the current 12 months by 19 percent, to $2.6 billion.
