Sony posts a loss as sales drop
Sony Corp. saw sales drop nearly across the board in its fiscal second quarter as the Japanese consumer electronics and media giant continued to struggle with a withering global economy.
As shoppers around the world cut back on buying televisions, cameras and computers, Sony’s revenue plunged 19.8% to $18.5 billion from the same quarter last year. Bargain pricing also eroded profit margins, leading Sony to swing from a $200-million profit last year to a $292-million loss.
Sales slipped in all of Sony’s divisions except for its financial services business in Japan. Sales at its consumer products and devices division, which includes its Bravia TV and Cybershot camera businesses, fell 36.5% to $8.9 billion as consumers bought fewer electronics at lower prices. Still, the unit had a $99-million operating profit.
Its networked products division, which includes Sony’s PlayStation video game and Vaio computer businesses, also saw a steep 24% drop in sales to $3.9 billion. Losses for the unit widened to $654 million, accounting for the bulk of Sony’s operating loss in the quarter.
Sales of its PlayStation 3 game console jumped 33% to 3.2 million units, thanks to a $100 price cut that brought the price down to as little as $299. But that was not enough to make up for a 24% slide in sales of the PlayStation 2 and a 6% decline in sales of its hand-held PSP console.
Consumers appear to also have cut back on other types of entertainment. Sales for Sony’s music labels, the second largest in the world after Universal Music Group, fell 3%. But the drop was cushioned by a surge in the popularity of Sony’s catalog recordings of Michael Jackson, leading the unit to post a $96-million operating profit on $1.4 billion in revenue.
Sony’s movie business also took a hit. Sales declined 30% to $1.5 billion as consumers bought fewer DVDs and curtailed trips to the movie theater. Sony Pictures posted a $71-million loss for the quarter.
On a brighter note, the company said it now anticipated lower losses than it initially projected for its fiscal year that ends in March. Sony credits the improved outlook to the ability of its consumer products business to turn a profit, thanks in part to aggressive cost-cutting.
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