Sony Electronics Sales Reach $12.2 Billion

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TOKYO -- Spearheaded by "significant increases" in such product categories as notebook PCs, color TVs, video and digital cameras and DVD players worldwide -- and sales of PCs, color TVs, digital cameras, DVD players, video cameras and computer peripherals, specifically in the United States -- the overall electronics business segment at Sony Corp. enjoyed a 13 percent increase in sales and a 132 percent jump in operating income, on a local currency basis, during the fiscal year ended March 31, compared to fiscal 1999.

More specifically, sales for Park Ridge, N.J.-based Sony Electronics, the sales leader among Sony Corp. subsidiaries worldwide, reached $12.2 billion for the fiscal year, which, compared to the same 12-month period last year, is an increase of more than 15 percent on a local currency basis, said Sony.

"We achieved significant growth in the past year due to continued success of our new digital A-V and IT devices," said Fujio Nishida, Sony Electronics president and chief operating officer. Nishida said that several sectors that contributed to the company's overall sales performance included FD Trinitron, WEGA TV sets, Digital 8 Handycam camcorders, Digital Mavica cameras, DVD players and VAIO notebook personal computers.

Sony attributed strong worldwide electronics segment results to improved profitability, mainly from higher demand for such products as PCs and digital A-V equipment, along with improved efficiencies in manufacturing plants.

Worldwide, Sony said sales of MD format headphone stereos increased during fiscal 2000, compared to 1999, while those of compact-cassette format headphone stereos decreased. Sales of DV and Digital 8-format video cameras increased significantly, while those of 8mm-format video cameras decreased. Sales of cellular phones decreased overall, primarily due to discontinuation of this business in the United States.

Game segment sales, on a local currency basis, dropped about 6 percent for the year worldwide, and operating income decreased about 5 percent. This was due to such factors as decreased shipments of PlayStation hardware in the United States and Japan, reflecting high penetration ratios as well as strategic price reductions in certain areas, Sony said.

The overall decrease in sales remained small, even during the introduction period of a new format, due to higher sales of software mainly in the United States and Europe, reflecting the increased penetration of PlayStation hardware. Profit decreased compared to the previous year due to start-up expenses of PlayStation2, which was introduced in Japan last March.

Game segment sales for the year, reflecting the impact of the translation of financial results and condition into yen, dropped 16.5 percent to $6.2 billion, while operating income decreased 43.3 percent to $730 million, compared to the previous year. On a quarterly basis, game sales dipped 0.9 percent to $1.4 billion, with operating income showed a loss of $243 million, compared to a profit of $405 million in the previous year.

Worldwide shipments of PlayStation hardware were 18.5 million units for fiscal 2000, compared to 21.6 million units the previous year.

Electronics segment sales on a local currency basis (U.S. dollar basis) do not reflect the impact of the translation of financial results and conditions into yen. Thus these take on more positive results, producing much more muted figures. More negative results would be the case with yen-appreciated overall numbers for the electronics business segment, which saw sales rise 1.1 percent to $44.5 billion and operating income decrease 9.5 percent to $1.1 billion, compared to fiscal 1999.

For the fourth fiscal quarter, also ended March 31, overall electronics segment sales were up 18.3 percent to $11.1 billion, on an appreciated-yen basis, while operating income narrowed its loss to $141 million, down from $522 million in the same three-month period last year.

In specific product categories for the year, audio sales declined 12.8 percent to $8.8 billion, video increased 0.8 percent and television moved up 1.6 percent, all on the same basis. Profit performance for color TVs deteriorated due to increases in R&D expenses in connection with broadcast digitization, while profit performance for computer peripherals and PCs improved.

For the fourth quarter, audio sales dropped 0.7 percent to $1.9 billion, while video increased 5.5 percent to $2.1 billion and television jumped 32.8 percent to $1.7 billion, all on a yen-appreciated basis.

Geographically, U.S. sales for the year dropped 6.1 percent to $19 billion, while sales in the fourth quarter increased 9.1 percent to $4.6 billion, compared to the same periods last year. Numbers are on a yen-appreciated basis.

Total corporate sales at Sony for the fiscal year decreased 1.7 percent to $63 billion, while operating income decreased 30.9 percent to $2.3 billion, compared to the previous year, due to the yen's appreciation.

In the quarter, sales increased 11.7 percent to $15.6 billion, compared to 1999, while operating income recorded a loss of $339 million, a bit less that the $370 million recorded in the fourth quarter last year. This was due to the appreciation of the yen, which was 9 percent higher against the U.S. dollar, compared with the fourth quarter of the previous year. On a local currency basis, sales increased about 20 percent.

Looking at building competitiveness in its electronics segment, Sony said it is proceeding with its reorganization plans focused on key businesses, consolidation of manufacturing plants, optimization of logistics operations, reduction of the number of employees and introduction of the Six Sigma method for improving management quality.


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