The Sony Corp reported a 61 percent increase in net profit for the most recent quarter, as Spider-Man 2 pulled in big profits for the company's movie division and helped conceal slides in its consumer electronics and video game businesses.
Sony's net income rose to ?53.2 billion (US$500 million), or ?53.76 a share, for the second fiscal quarter ended Sept. 30, from ?32.9 billion, or ?33.48 a share, in the same quarter a year earlier. Revenue, however, fell 5.3 percent, to ?1.70 trillion (US$15.9 billion) in the quarter.
Sony nudged up its earnings forecast for the fiscal year ending next March to ?110 billion (US$1.04 billion) from an earlier estimate of ?100 billion. The new forecast represents a 24 percent increase from Sony's ?88.5 billion profit last year.
The better-than-expected results show that Sony is making progress in the ground-up reorganization it began last year, when rapidly falling prices for televisions and video equipment began to crush profits at the company's core electronics business. That Sony's movie unit was its biggest source of profit growth appears to validate the company's move to greatly expand it by leading a consortium to buy the Metro Goldwyn-Mayer studio.
"In the second quarter, our profit got a big boost from the pictures division thanks to Spider-Man 2 and DVD sales," Katsumi Ihara, Sony's chief financial officer, said on Thursday.
But while profit was up, there were troubling signs elsewhere. The decline in revenues was partly because of the outsourcing of production of its PlayStation 2 game machine to Chinese companies.
More important, Sony has yet to see a rebound in profit in its core electronics unit, which accounts for 70 percent of overall sales, because of continuing pressure to cut prices on its televisions and other electronic equipment. Operating profit in the electronics division plunged 83 percent for the quarter while revenue slipped 2.5 percent to ?1.24 trillion.
Although the company sold more flat-panel TVs, DVD players and digital cameras, sales of traditional cathode-ray tube televisions and audio equipment declined. At the same time, pressure to cut prices of DVD players and flat-panel TVs pinched margins even as sales volumes for those products rose.
Still, analysts are optimistic that years of rigorous cost-cutting and some promising new products, like a new line of flat-panel televisions and DVD recorders, can ignite a turnaround in the electronics unit later this year.
The company also has high hopes for the PlayStation Portable, or PSP, a hand-held video game and movie player that goes on sale in Japan in December and in the US early next year. Sony is counting on the device to breathe new life into its once highly profitable games division.
"There's more upside for Sony because of its new products, specifically PSP," said John Yang, an electronics industry analyst for Standard & Poor's in Tokyo. "It should really do some good things for Sony as a group."
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