Sony reports profits well ahead of forecast

Sony reports profits well ahead of forecast

Sony has reported higher sales and profits for the year to the end of March, beating its own forecasts.

Sales of products like flat-screen LCD televisions and the widespread availability of the PlayStation Portable during the year helped boost its key electronics and gaming segments.

The increase in LCD TV sales is especially important for Sony because its late entry into the booming market had seen it lose market share to faster rivals like Sharp Corp. However, with the sales increase Sony also delivered some bad news: fierce competition in the market pushed prices down, so profits from its LCD TVs decreased.

Sony sold 2.8 million LCD TVs during the fiscal year, up from 1 million a year earlier, while PSP sales jumped to 14 million from 3 million units, the company said.

The company reported a net profit for the year of YEN 124 billion ($US1 billion as of March 31, the last day of the period being reported), about a third lower than in the year prior but well ahead of Sony's forecast of a YEN 70 billion profit. That forecast was made in January, and itself was a revision on a prediction made in September 2005 of a YEN 10 billion loss for the year.

Total sales came in at YEN 7.5 trillion, which was up 4 per cent on the year and slightly higher than Sony's forecast.

Overall, its core electronics segment saw a 2 per cent increase in sales but ended with an operating loss of YEN 31 billion. Profits in the game sector were also sharply lower as a result of research and development costs associated with the PlayStation 3 console, which is due to launch in November.

Sony expected to ship six million PlayStation 3s between when it launched and the end of March 2007, it said.

Restructuring costs during the year were YEN 139 billion, which were about 54 percent higher than last year. The majority of those costs were recorded in the electronics sector.

"Restructuring is on track," said Oneda. He sounded cautiously optimistic of the company's progress in meeting targets set by the plan, which was begun last year after Howard Stringer took over leadership of Sony.

For the current financial year, ending in March 2007, Sony expected net profit to climb to YEN 130 billion and net revenue to hit a record YEN 8.2 trillion, it said.

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