Sony bounces back to profit in Q1

Sony returned to profit in the April-June quarter on the back of higher sales in its electronics division and a strong debut for The Da Vinci Code movie. It was the first time in four years that Sony recorded an increase in electronics division operating profit in its fiscal first quarter.

The company reported a net profit of YEN 32.3 billion ($US277 million) against a YEN 7.3 billion net loss in the same period a year earlier. Sales rose 11 per cent to YEN 1.7 trillion on higher sales of electronics products including Bravia flat-panel televisions and its new Alpha digital still camera.

Sony's key electronics division returned to profit posting a YEN 47.4 billion operating profit on 13.5 per cent-higher sales of YEN 1.1 trillion. In addition to flat-panel TVs and digital cameras, Vaio laptop sales were higher but those of PDP (plasma display panel) and CRT TVs fell.

"We believe the electronics business is steadily moving along the road to recovery," Sony's chief financial officer, Nobuyuki Oneda, said.

The games unit reported lower revenues as PlayStation 2 and PlayStation Portable sales fell compared to the same period last year. The unit recorded a loss of YEN 26.8 billion for the three-month period. Sony shipped 2.5 million PlayStation 2s during the quarter, down 1 million units year-on-year. PSP shipments were 2 million, down slightly from the year-ago period.

"Despite more than six years have elapsed since the launch of the PlayStation 2 demand remains strong and we have increased our shipping forecast for the year," senior vice-president of Sony, Takao Yuhara, said. The company now expects full-year shipments of PlayStation 2 consoles to be 11 million units, up 1 million from the forecast it gave in April.

About 12 million PSPs and 6 million PlayStation 3 consoles are expected to be sold in the year to the end of March 2007.

Strong results from Sony Ericsson Mobile Communications, which reported 41 per cent higher sales on 33 per cent higher unit shipments, also helped Sony's bottom-line to the tune of YEN 10.2 billion.

The company's ongoing restructuring was on plan, Oneda said. Of the YEN 200 billion in cost savings the company wantrfto achieve, YEN 76 billion has been realised by the end of June, he said. The targets for plant closure and consolidation and workforce reduction had already been reached while Sony still needrf to work on reducing the number of product models it sold.

Looking ahead the company raised its full year sales and operating profits forecast. It now expects to record sales of YEN 8.23 trillion, up YEN 30 billion on its previous prediction. Its operating profits forecast has been raised by a similar amount to YEN 130 billion. Its net income forecast of YEN 130 billion remains unchanged.

The upgrade in forecasts was due to a reclassification of royalty income as a component of sales and operating revenue rather than other income, Sony said.