Sony Swings to $827 Million Q2 Operating Profit

Sony swung to an $827 million Q2 operating profit from a year-earlier loss on a 4.3 percent sales increase to $20.9 billion, the company said Friday. The company’s Networked Products & Services segment, which includes the videogame business and Vaio PCs, “contributed significantly” to the improved results, Sony said. Figures assume $1 = 83 yen. Meanwhile, Panasonic’s operating income nearly doubled, but the company said it’s leaving its full-year forecast unchanged, citing the “uncertain business environment” that’s expected to persist well into the second half.

The Networked Products & Services sector swung to an $84 million operating profit from a year-earlier loss on a 5 percent sales increase to $4.4 billion, Sony said. Though sales in the game business fell overall from a year earlier, PS3 hardware and software increased year-over-year “and benefited from the introduction of PlayStation Move in the current quarter,” it said. Sales in the game business fell 12.9 percent to $2.1 billion, but sales jumped 23.6 percent in the PC business, also to $2.1 billion, Sony said.

In Sony’s Consumer, Professional & Devices sector, operating profit jumped 160 percent to $203 million on an increase in gross profit, improvement in the cost-of-sales ratio and lower restructuring charges, the company said. It cited higher sales of digital cinema projectors and broadcast- and professional-use products for HD production, as well as semiconductors, as contributing to the jump in operating profit. However, lower average selling prices of Bravia LCD TVs hurt the sector’s operating performance, though unit sales of the TVs climbed from a year earlier, Sony said. Sales of TVs jumped 18.8 percent to $3.1 billion.

Sony’s LCD TV sales in the quarter climbed to 4.9 million units from 3.3 million in Q2 a year earlier. It forecast they'll rise to 25 million units for the fiscal year from 15.6 million. In games, PS3 hardware sales jumped to 3.5 million units in Q2 from 3.2 million a year earlier, but PSP unit sales plummeted to 1.5 million units from 3 million, it said. Sony sees PS3 sales for the year rising to 15 million units from 13 million, but PSP unit sales are expected to fall to 8 million units from 9.9 million. PS3 software sales jumped in Q2 to 35.3 million units from 23.9 million units, but PSP software unit sales fell to 11 million from 13 million. For the year, Sony expects PS3 and PSP software unit sales to stay unchanged at 116 million and 44 million, respectively, it said.

In Consumer, Professional & Devices, Sony downgraded its operating profit forecast for the full fiscal year from its July projection, the company said, without saying by how much. “Operating income in the second quarter was generally in line with the July forecast,” the company said. “However, Sony is viewing cautiously the CPD segment operating results for the second half of the fiscal year, compared to the July forecast. This is mainly due to the impact of the updated foreign exchange rate assumption, namely the further appreciation of the yen against the U.S. dollar, and deterioration in the North American LCD TV business environment.” Overall, Sony thinks its sales for the fiscal year will be 200 billion yen lower than its July forecast.

Panasonic’s Q2 operating profit nearly doubled to $1.03 billion, the company said Friday. “This result was due mainly to strong sales, and streamlining of material costs and other general expenses, offsetting severe price competition and appreciation of the yen.” Overall sales in the quarter jumped 27 percent to $27 billion. Panasonic is leaving its fiscal-year forecast unchanged from the July outlook, the company said. “Although the global economic recovery led by the emerging countries is expected to continue, Panasonic anticipates that uncertainty in the market will continue due to the latest signs of faltering economic recoveries in the U.S. and Europe,” it said. The company said it expects the “uncertain business environment to continue from the third quarter onward, with further price declines due to ever-intensifying competition, appreciation of the yen and rising prices for raw materials.”