Sony net income drops 71.8% in fiscal Q2
Game unit a high spot on PS3 hardware cost reduction
By Susanne Ault -- Video Business, 10/29/2008
OCT. 29 | Sony suffered through severe earnings declines in its fiscal 2008 second quarter, which the company blamed on growing electronics pricing competition and the appreciation of the yen against the U.S. dollar.
For the three months ended Sept. 30, Sony posted 20.8 billion yen ($200 million) in net income. That marks a 71.8% drop from how the company performed during the same period last year.
Revenue fell 0.5% to 2.1 trillion ($19.9 billion).
One bright spot was Sony’s game division, which more than halved its operating income loss to 39.5 billion yen ($379 million) due to PlayStation 3 hardware cost reductions and improving PS3 software sales. For the same frame in fiscal 2007, the category recorded an operating income loss of 96.7 billion yen.
During the current quarter, Sony sold 2.43 million PS3 units, which marks an increase of 1.12 million units over unit sales during last year’s comparable frame. Additionally, Sony sold 3.18 million PlayStation Portables and 2.5 million PlayStation 2s, representing an uptick of 600,000 units and decrease of 780,000 units, respectively.
Sony’s filmed unit also enjoyed relative success due mostly to the summer box-office performance of Hancock. Operating income rose nearly 200% to 11 billion yen ($106 million). Home entertainment releases 21 and Vantage Point also contributed to the division.
Elsewhere, Sony was hit particularly hard. Due to the significant decline in the Japanese stock market, Sony’s financial services segment tallied a 25.3 billion yen ($243 million) operating income loss. During last year’s frame, the segment posted a 23.1 billion yen gain.
Sony's electronics division’s operating income fell 40.5% to 75.6 billion yen ($727 million). That reflected sliding unit prices especially for Sony’s Cyber Shot digital camera line. Its VAIO PCs and Handycam video cameras were likewise hit with competition and lower pricing.
