Sony profit sinks, PlayStation software sales drop

Sony says sales in its electronics business increased significantly in the third quarter of this financial year, but not enough to offset the effects of the strong Japanese yen and a lacklustre quarter in the games sector.

          Sony reported yesterday that sales in its electronics business increased significantly in the third quarter of this financial year, although not enough to offset the effects of the strong Japanese yen and a lacklustre quarter in the games sector.

          Net income for the third quarter, the period from October to December 2000, fell 22.8%compared to the same period in 1999 to 72.2 billion yen ($US614.5 million), pretax income was down 19.6%to 133.4 billion yen, operating income was 10.8%lower at 146.5 billion yen and net sales, while operating revenue climbed 10.1%to 2.1 trillion yen. (See table, below.)

          In its core electronics business, which accounted for 67%of all sales in the quarter, Sony said results were strong, increasing 22%on a local currency basis and 16%when converted into Japanese yen. Operating income in the sector grew 52.8%to 131.6 billion yen. Sales of digital electronics equipment were particularly strong around the world.

          In its home market of Japan, the company said sales of personal computers, digital still cameras, semiconductors, cellular telephones and broadcast and professional use equipment increased, although audio equipment sales were weak. In the U.S., sales of PCs, color TVs, video and digital still cameras and DVD (digital versatile disc) Video players jumped while in Europe sales of many of the same products, with the addition of cellular telephones and computer displays, were strong. Sales of CD-R/RW (compact disc recordable/rewritable) drives and semiconductors advanced in Asia.

          The picture was poor in the game business, which saw sales almost unchanged on the same period the year before. At the operating level, the sector plunged 13.9 billion yen into the red from a profit of 57.5 billion yen in the third quarter of 1999.

          The company saw software sales decrease in Japan, the U.S. and Europe. Shipments of PlayStation games, from Sony and third party producers, were 54 million units against 82 million units in the same period a year ago while those of PlayStation 2 software were 16.9 million units. Cumulative shipments of software hit 744 million units for the PlayStation and 24.9 million for the PlayStation 2.

          Hardware sales were higher in all three markets thanks to the introduction of the PlayStation 2 in the U.S. and Europe and the introduction of a restyled PlayStation, dubbed PSOne, in Japan. During the third quarter shipments of the new PlayStation 2 console were 2.9 million units to take total shipments to 6.4 million units. Shipments of PlayStation and PSOne machines were 3.7 million units in the three months to make total shipments 79.6 million, said Sony.

          In the company's other business sectors, results were mixed. The music sector saw sales fall 10.9 percent, the pictures business reported an 8.5%increase in sales and the insurance business saw sales advance by 12.9 percent.

          Sony also issued a revision to its forecast for full year results. The company said it now expects full year sales and operating revenue to be 7.2 trillion yen, operating income to be 260 billion yen, income before income taxes to be 255 billion yen and net income to be 5 billion yen. The latest estimates include a downward revision in forecast operating income and a further cut in the company's outlook for net profit. Should Sony meet its estimate, it will be a 96%drop from the previous year.

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