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Sony announces operating profit

Japan's Sony Corp said yesterday that it had swung back to an operating profit in the three months to last month from a loss a year earlier caused by recalls of millions of computer batteries.

The electronics giant said strong sales of electronic goods such as flat televisions also helped drive the recovery, offsetting increased red ink at the game unit due to the loss-making PlayStation 3 (PS3).

Sony posted an operating profit of ¥90.5 billion (US$794 million) for the fiscal second quarter against a loss of ¥20.8 billion a year ago, and upgraded its full-year outlook slightly on the basis of the strong first half.

Net profit jumped to ¥73.7 billion from ¥1.7 billion while revenue increased by 12.3 percent to ¥2.08 trillion.

Sales at the core electronics division increased by about one-fifth, driven by brisk demand for Bravia liquid-crystal-display (LCD) televisions, VAIO laptop computers and Cyber-shot digital cameras.

"For the second half we will be launching full high definition (TV) models and we expect they will be well received in the market," chief financial officer Nobuyuki Oneda said.

Losses at the game division more than doubled to ¥96.7 billion as the company sold 1.31 million PS3s for less than the production price.

Sony is facing fierce competition in the game console market from rival Nintendo, which earlier reported a 144 percent leap in first-half net profit.

Oneda said the company hopes to make a profit in the game unit in the next financial year after absorbing the console's huge developments costs.

Sony upgraded its full-year outlook, predicting a 527 percent increase in operating profit to ¥450 billion, against a previous target of ¥440 billion.

Net earnings are now forecast to jump 161 percent to ¥330 billion in the 12 months to March, compared with an earlier projection of ¥320 billion.

Sony has been streamlining to focus on its core electronics unit. Last week it said it would sell the production lines for the powerful computer chip at the heart of the PS3 to rival Toshiba for a reported US$1 billion.

Sony has also axed thousands of jobs since Howard Stringer took over in 2005 as the company's boss.
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