Sony sales, net profits sharply higher
Sony earned sharply higher net profits in the financial year just ended on
the back of stronger sales, but missed an already-lowered operating profit target,
it said Wednesday.
The company reported net profits of ¥369 billion (US$3.5 billion) for the
year to March, with sales up 7 percent to ¥8.9 trillion, which represents
a new record for Sony. Net profit was significantly boosted thanks to restructuring
steps that saw Sony sell several buildings, including the Sony Center in Berlin,
and a portion of its former headquarters building in Tokyo.
Operating profit, which more closely measures the profitability of Sony's core
electronics operations and excludes most non-core and one-time gains and charges,
was ¥374 billion, more than four times that reported in the previous year,
but less than Sony's target of ¥410 billion. Sony had originally forecast
an operating profit of ¥440 billion but revised it down three months ago.
In Sony's core electronics business sales rose 9 percent and operating profits
surged 122 percent, although the profit jump was primarily as a result of the
depreciation of the yen against the euro.
Sales and profits from the Cybershot digital still camera and Vaio computer
businesses rose but while Sony saw higher sales of Bravia LCD (liquid crystal
display) televisions, profitability worsened due to lower retail prices and
fierce competition.
Sony was late to the LCD TV market, but sales of its Bravia sets have been
taking off in recent years. In the year to March Sony sold 10.6 million TVs,
up from 6.3 million last year.
This year it expects sales to hit 17 million units and hopes to expand its
market by using cheaper panels in low and mid-market sets where price competition
is greatest. These panels will be sourced from other companies while Sony will
continue to make its own panels for high-end models. Additionally Sony will
also reduce the number of TV chassis used across its range from five to two
to realize greater efficiency in manufacturing.
Games sales rose 26 percent as the popularity of the PlayStation 3 and PlayStation
Portable took off. The business remained in the red for the year but losses
were cut from ¥232 billion to ¥124 billion. Sony said it expects the
games business to return to profit in the current year.
For the current fiscal year Sony expects sales to rise by 1 percent to ¥9
trillion [t], operating profit to climb to ¥450 billion and net income to
be ¥290 billion.
IDG News Service
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