Feeds

Sony Q3 profits plunge as sales slump

Customers favour films more than electronics

  • alert
  • submit to reddit

The essential guide to IT transformation

Sony's third-quarter earnings rose 55 per cent, but more on the back of content than the kit used to play it back.

Sales for the three months to 31 December 2004 totalled ¥2.15tr ($20.9bn), down 7.5 per cent on the year-ago quarter's total, ¥2.32tr ($22.5bn).

Net income came to ¥143.8bn ($1.4bn), up 55.3 per cent from ¥92.6bn ($898.9m) a year ago, thanks to a tax credit. However, operating profit fell 13 per cent over the same period to ¥138.2bn ($1.34bn).

The reason, the electronics and media giant said, was declining demand for PlayStations, CRT TVs, camcorders and portable audio systems. Falling component prices hit the company's figures too. Despite a strong brand, Sony's electronics sales have been hit by competition from cheaper Asia-sourced product. It also failed to tap into emerging demand for large-format LCD and plasma TVs as well as its Japanese and South Korean rivals. Ditto the way it ceded dominance of the portable music market to Apple's iPod.

"We take pride in the fact that the portable audio market is a market that Sony created so we must rebuild our presence in this market," CFO Katsumi Ihara said.

Q3 electronics sales were down 0.9 per cent year on year but income plunged 23 per cent to ¥49bn ($475.7m) from ¥64.4bn ($625.1m)

Falling demand and price reductions helped cut Sony Computer Entertainment's operating income to ¥44.6bn ($432.9m) down 37 per cent on the year-ago quarter's ¥70.5bn ($684.3m).

However, Sony's media interests, in particular Sony Pictures Entertainment (SPE), boosted the bottom line. Spiderman 2 DVD sales were particularly strong, the company said.

SPE's Q3 operating profit more than tripled to ¥18.6bn ($180.6m) from ¥5.6bn ($54.4m) the previous year. Sales jumped 12 per cent over the same period. Music operating income fell 26 per cent to ¥12bn ($116.5m) from ¥16bn ($155.3m), in part due to August's merger of Sony Music Entertainment and Bertelsmann Music Group into Sony BMG.

Improved results from its mobile phone JV, Sony Ericsson, helped too.

The company pledged to revivify key consumer electronics lines the better to compete with its rivals.

"We are resolutely working to ensure a revitalisation in the profitability of the Sony Group," said Chief Executive Nobuyuki Idei.

Sony maintained its full-year profits forecast: ¥150bn ($1.46bn), up from ¥88.5bn ($859.1m) last year. ®

Related stories

Nintendo's Q3 income falls 43%
Sony PSP outships Nintendo DS
EA sales, profits slide
Transmeta licences low-power tech to Sony
Sony PSP ship total hits 800,000
Sony slashes FY2005 profit forecast

Next gen security for virtualised datacentres

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Kaspersky backpedals on 'done nothing wrong, nothing to fear' blather
Founder (and internet passport fan) now says privacy is precious
TROLL SLAYER Google grabs $1.3 MEEELLION in patent counter-suit
Chocolate Factory hits back at firm for suing customers
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
Ex-IBM CEO John Akers dies at 79
An era disrupted by the advent of the PC
prev story

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Backing up Big Data
Solving backup challenges and “protect everything from everywhere,” as we move into the era of big data management and the adoption of BYOD.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?