Sony Q3 profit drops as TVs erase gaming gains
Tokyo, February 3, 2011
Japan's Sony Corp posted a 5.9 percent fall in third-quarter profit on Thursday as a price war hit its TV unit and a stronger yen weighed, and lowered its revenue forecast on slower-than-expected TV sales.
The consumer electronics giant, which competes with Samsung Electronics and LG Electronics in televisions and Canon and Nikon in digital cameras, has been struggling to keep pace with rivals in terms of profits and products.
Since CEO Howard Stringer took the helm in 2005, the company's share price has fallen by a quarter and Sony has failed to replicate its early successes with iconic products such as the Walkman and PlayStation game console.
Sony reported an operating profit of 137.52 billion yen ($1.68 billion) versus 146.1 billion yen in the same period a year earlier, beating an average quarterly estimate of 127 billion yen in a poll of eight analysts by Thomson Reuters I/B/E/S.
"In this strong-yen environment we see this as a pretty healthy result," chief financial officer Masaru Kato told reporters.
"We are getting stronger, but we feel we are still only partway there," he added.
The maker of Vaio PCs and Bravia TVs left its full-year operating profit forecast unchanged at 200 billion yen, compared with a consensus estimate of 217 billion yen in a poll of 23 analysts by Thomson Reuters I/B/E/S.
It cut its annual revenue forecast by 3 percent to 7.2 trillion yen citing lower-than-expected sales in the consumer, professional and devices segment, which includes LCD TVs.
Operating income in that segment dropped by almost half in the third quarter, while profit more than doubled in the network products and service division, which includes games, partly on brisk sales of the latest version of Gran Turismo motor racing game, Sony said.
It cut its forecast for sales of TVs in the full year to March 31 to 23 million units, down from its previous forecast of 25 million. But it kept its forecast for PS3 game console sales unchanged at 15 million units. - Reuters