Sony books $375M quarterly profit on better sales

AP News
Posted: Oct 29, 2010 3:24 AM
Sony books $375M quarterly profit on better sales

Sony Corp. returned to the black in the latest quarter and raised its earnings forecast thanks to brisk sales of its PlayStation 3 gaming consoles and personal computers

The Tokyo-based electronics and entertainment company on Friday reported a profit of 31.1 billion yen ($375 million) for the July-September quarter. It was a big rebound from the 26.3 billion yen loss it posted a year earlier.

The solid results reflect the success of cost cuts and restructuring carried out under Chief Executive Howard Stringer. Since taking over in 2005, the Welsh-born CEO has been trying to unite the company's sprawling businesses and improve efficiency.

Revenue climbed 4.3 percent to 1.73 trillion yen. Operating profit came to 68.7 billion yen compared with an operating loss of 32.6 billion yen last year.

Its "Networked Products & Services" division, which includes gaming and PCs, did particularly well, Sony said. PC unit sales surged more than 60 percent to 2.3 million, and it sold 3.5 million PlayStation 3 consoles, up 9 percent from the fiscal second quarter last year.

The September launch of the highly anticipated PlayStation Move motion-sensing game controller helped drive demand, the company said.

Last week, Sony said that it had shipped more than 1 million Move controllers in North America and Latin America in the first 30 days since they went on sale, a sign of strong demand that bodes well for the holiday season.

Offsetting some of the momentum was a stronger yen _ which has hit multiple 15-year highs against the dollar _ lower sales of LCD TVs and video cameras, and higher marketing costs for films.

Sony's music business also weakened, booking a sales decline and an operating loss. The company blamed lower demand for Michael Jackson music, which bolstered sales last year and ongoing contraction of the physical music market.

Sony raised its earnings forecast for the full fiscal year through March 31. It now expects net profit of 70 billion yen, 17 percent more than its previous forecast of 60 billion yen.

It lowered its sales outlook slightly to 7.4 trillion yen due to the impact of the strong yen, which erodes income brought back to Japan from overseas sales.

Sony based its revisions on an average exchange rate of 83 yen to the dollar and 110 yen to the euro for the second half. In previous forecast in July had assumed 90 yen to the dollar.