TOKYO (Dow Jones)–Sony Corp. (6758.TO) posted a sharp increase in net profit in the October-December quarter and narrowed its full-year loss forecast as the benefits of restructuring measures took hold and sales of its PlayStation 3 surged following a price cut.
Fortified by a 44% jump in PlayStation 3 game console sales, Sony said Thursday net profit in its fiscal third quarter was Y79.2 billion, compared with a Y10.4 billion profit in the same period a year earlier. It was better than a mean estimate for a profit of Y33.73 billion by analysts polled by Thomson Reuters. Revenue rose 3.9% to Y2.24 trillion.
Sony is still clawing out from the trough of a global economic downturn that crippled the company’s electronics business. It closed 18% of its plants, eliminated 20,000 jobs and overhauled its supply chain to reduce its costs by Y330 billion. At the same time, it is trying to reinvigorate its products by allowing them to link to online content and services.
“We think we’ve bottomed out,” Nobuyuki Oneda, Sony’s chief financial officer, said at a briefing with reporters.
An analyst at a Tokyo brokerage, who declined to be identified before taking a closer look at the figures, said Sony’s results appear to be improving and that they show signs of restructuring progress. But he questioned how big a chunk of restructuring charges is being deferred to Sony’s fiscal fourth quarter through March.
There are signs of recovering demand across the electronics industry. South Korea’s Samsung Electronics said on Friday that it returned to profit in the last three months of 2009 thanks to profitability improvements at its chip business, and Sharp Corp. also bounced back into the black after a year-earlier loss, boosted by better results from its liquid crystal display television business.
For the full year ending March 31, Sony narrowed its net loss forecast to Y70 billion from a loss of Y95 billion in its previous outlook. It kept its revenue forecast unchanged at Y7.3 trillion, but halved its operating loss forecast to Y30 billion from an October projection of Y60 billion.
Sony posted a marked improvement in results from its core electronics business. The consumer products and devices division said cost reductions and a somewhat weaker yen helped boost the performance of liquid crystal display televisions and digital cameras even though sales fell 10.7%. The unit reported an operating profit of Y49.4 billion versus a loss of Y19.8 billion in the same period of the previous year.
At its network products and services business, home to its video game division, Sony returned to profit during the quarter with net income of Y19.4 billion from a loss of Y5.9 billion in the year-earlier period. Sales rose 1.9% to Y606.1 billion.
Sales of the PS3 console started to pick up after Sony dropped the price of its model with an 80-gigabyte hard drive by 25% to $299 in September.
Sony did not provide financial forecasts for the coming fiscal year, but Mr. Oneda did offer some clues about how it saw its products shaping up. He said he expects its LCD television sales to rise at least 33% to more than 20 million units in the fiscal year starting April 1, 2010 from a projection for 15 million units in the current fiscal year.
Sony also sees significant growth potential in the e-reader market. The company said it expects to sell more than one million units in 2010 and then sees that figure growing two-fold or three-fold in the next few years.
