Business

Sony Returns Its Electronics Units to Profit, Raises Outlook

Sony saw profitability return to its core electronics operations in the July to September period and increased its full-year profit forecast despite taking a hit from the strong Japanese yen.

Net income at the company was ¥31 billion (US$371 million as of Sept. 30), an improvement on a net loss recorded in the same period of 2009. Sales were up 4 percent at ¥1.7 trillion.

Sales of some of Sony's key products jumped compared to the same period a year earlier. Bravia LCD TV sales were up by half, Cybershot digital camera sales jumped by a fifth and Vaio PC sales rose by two-thirds.

The PlayStation 3, buoyed by the launch of the Move motion controller, saw sales increase by 9 percent but sales of the PlayStation Portable fell by half, to 1.5 million units. Earlier this week Sony said it would cut the price of the PSPgo to boost sales.

Sony's results are a further sign that an ongoing restructuring program at the consumer electronics and entertainment giant is having the desired effect.

Under the leadership of Howard Stringer, Sony has cut back on unprofitable product lines and closed or sold factories. During the quarter, Sony reached a deal to sell its TV manufacturing plant in Spain to two local companies.

The latest results mark a return to profitability for Sony's networked products division, which includes its gaming and PC businesses. In the July to September period last year it lost money but in 2010 it recorded an operating profit. Sales at the division rose 5 percent.

The company's consumer products division, which includes the rest of its electronics operations, also saw sales and profit rise.

Sony said results in the two divisions could have been higher if it wasn't for Japan's strong yen. The currency is trading around a 15-year high against the U.S. dollar, and hurting large Japanese exporters like Sony.

The main electronics units would have seen additional sales of ¥123 billion and operating profit of ¥47 billion if exchange rates had remained unchanged from a year earlier, the company said.

Sony revised its financial forecast for the rest of the year. It expects sales to be ¥7.4 trillion, a decrease of 3 percent from its forecast made in July but still 3 percent above its actual results for the previous financial year. Net income is expected to be ¥70 billion, up 17 percent on Sony's previous estimate and a healthy turn-around from the loss reported last year.

Martyn Williams covers Japan and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is martyn_williams@idg.com

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