MAY 2008 W3 ALERTSony Surprises...Surprising Annual Records...Surprising Quarterly Losses
Company Results Largely Positive; Expects TV and Videogame Growth
<Reuters/Nikkei/Others><May 14, 2008>Sony surprised the market with dramatic results in its report of the fiscal year ended March 31, 2008. While mostly positive with annual results showing dramatics swings in profits and good sales results, the fourth quarter for the company came in under expectations according to a report from Reuters.
First the good news…Sony reported new fiscal year records for consolidated sales and net earnings. In the Electronics segment, the company also reported records set for sales and operating income. And, feeling generous, Sony plans to treat investors to increased dividends of ¥50.
Somewhat moderating all of this good news however, Sony showed a fourth quarter loss of ¥4.7 billion (about $45 million). While this was better than last year’s ¥113 billion loss…it was worse than analysts’ expectations. In a survey of analysts by Reuters, the expectation had been for a fourth quarter profit of ¥27.3 billion.
The annual results were significantly impacted by several non-recurring issues including the sale of its former headquarters site, the public offering of its financial unit, and the liquidation of semiconductor manufacturing facilities. Also, results were favorably impacted by positive currency exchange rates relative the euro.
The company showed strong profit results with annual net profits tripled to a record ¥369.4 billion. Operating profits surged from ¥71.8 billion to ¥ 374.5 billion. Sony’s TV division and videogame division showed losses, but the videogame division showed a decline in their losses relative the previous year.
Sales overall rose 7% to ¥8.87 trillion, largely thanks to a 9% sales gain in their Electronics division which showed units sales increases by shipping 40% more digital cameras and 70% more LCD TVs than the previous year.
In looking forward to the next fiscal year, Sony is forecasting a 1% sales increase to ¥9 trillion, a 20% increase in operating income to¥450 billion , and a 22% drop in net income to ¥290 billion.
Image courtesy Reuters