Feeds

Sony Q3 profits plunge as sales slump

Customers favour films more than electronics

  • alert
  • submit to reddit

Reducing security risks from open source software

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

Mobile application security vulnerability report

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Nadella: Apps must run on ALL WINDOWS – PCs, slabs and mobes
Phone egg, meet desktop chicken - your mother
White? Male? You work in tech? Let us guess ... Twitter? We KNEW it!
Grim diversity numbers dumped alongside Facebook earnings
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.