“The Sony Corporation posted a steep rise in net profit on Thursday, helped by favorable tax effects, but the figure masked declines in sales and operating profit as the aging PlayStation game console faltered and troubles continued in the electronics business,” Todd Zaun reports for The New York Times. “Sony’s net profit rose 55 percent, to 143.8 billion yen ($1.39 billion), or 138.08 yen a share, for the three months ended Dec. 31, its third fiscal quarter, compared with 92.6 billion yen, or 92.51 yen a share, in the year-earlier period. The increase, however, was solely because of tax credits accrued in its United States operation that added 68 billion yen to the quarter’s bottom line.”
“Sony’s revenue in the quarter fell 7.5 percent, to 2.15 trillion yen, from 2.32 trillion yen a year earlier, while operating profit sank 13 percent, to 138.2 billion yen, from 158.8 billion last year. For the quarter just ended, operating profit in Sony’s electronics division sank 23 percent, to 49.4 billion yen ($480 million), as sales of its portable music players fell in the face of competition from the iPod from Apple,” Zaun reports.
“Ken Kutaragi, the president of Sony Computer Entertainment and a favorite to succeed [current CEO] Mr. Idei, acknowledged in a speech last week that Sony had been late to the market for portable MP3 players, mainly because of worries at its movie and music units about copyright protection. ‘Even three years ago, because we had music, Sony was reluctant about introducing an iPod-type of new product,’ Mr. Kutaragi said. ‘The situation in the last several years is a bit frustrating for everyone.’ Analysts say Sony needs to break down such barriers to developing innovative gadgets. Sony’s last big breakthrough product was the PlayStation game machine, introduced in 1994,” Zaun reports.
Full article here.
