Beleaguered Sony’s profit plunges 94% after battery recall

“Sony’s profit plunged 94 per cent for the July-September quarter as a global battery recall and red ink in its video-game business hurt the Japanese electronics and entertainment company,” The Associated Press reports.

“Sony Corp.’s group net profit for the fiscal second quarter totalled $14 million (all figures U.S.), dwindling from about $240 million the same period the previous year, the Tokyo-based manufacturer said Thursday,” AP reports. “An extra cost of $429 million related to a global recall of 9.6 million Sony laptop batteries was a major factor behind the sharp drop in profit.”

“Sony reported a $366 million operating loss in its gaming division because of charges related to the preparation for the next-generation PlayStation 3 console, set to go on sale in the U.S. and Japan next month,” AP reports. “Sony trimmed its fiscal 2006 shipment target for its lagging PlayStation Portable handheld machines to 9 million from the initial 12 million machines. Sony shipped 14 million PSP machines in fiscal 2005.”

“In contrast, Japanese rival Nintendo Co. is scoring success with its DS handheld machine. The maker of Pokemon and Super Mario games said Thursday that its group net profit for the first fiscal half soared nearly 50 per cent,” AP reports. “Such stumbles forced Sony to revise last week its forecast for the fiscal year through March 2007, to $673 million, down 38 per cent from its initial projection and down 35 per cent from fiscal 2005.”

Full article here.
What did Sony’s profit scream while plunging? “Wii!!!”

15 Comments

  1. I wrote:
    Ok everyone relax. If they hadn’t had to recall nearly 10 million batteries, their profits would have been 56% higher than the same period last year. This means that assuming they don’t have a repeat of some devastating product defect like the battery recall, they’re doing pretty good. It’s quite amazing in fact that the recall didn’t push them into a loss.

    Correction: Their profits would have been <u>77% higher</u> than the year ago quarter, not 56% higher.

    Magic word: ‘federal’. Let’s not make a federal case out of it.

  2. Sony doesn’t stand for anything. They originally were called Sonus in the US, but the name wasn’t catchy so they decided to swich to SONY because they found American’s liked the name better.

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