Sony Profit Plummets 94 Percent

[BGonaSTICK]

Second-quarter profit at the Sony Corporation plummeted 94.1 percent to 1.7 billion yen ($14 million), due in large part to the recall of the company’s laptop batteries.

The company posted revenues of 1.85 trillion yen ($15.7 billion), an 8.3 percent rise on the year-ago period, and an operating loss of 20.8 billion yen ($177 million), versus an operating profit of 74.6 billion yen last year. The loss includes a 51.2 billion yen provision for charges expected to be incurred as a result of the recall of notebook computer battery packs that use lithium-ion battery cells manufactured by Sony. A number of companies, including Dell, Apple and Sony itself, have been forced to recall about 9.6 million batteries because they are said to be a possible fire hazard.

At Sony Pictures, revenues increased by 12.1 percent to 178.2 billion yen ($1.5 billion), a 12.1 percent increase. Sales increased primarily due to a greater number of theatrical releases, combined with higher theatrical revenue per film. This was partially offset by lower DVD revenues on theatrical films. But the division still posted a wider loss, of 15.3 billion yen ($129 million), compared to last year’s loss of 6.6 billion yen. Motion picture operating income was adversely affected by higher total marketing expenses and the theatrical underperformance of Zoom and All The King's Men. Lower DVD revenues also contributed to the increased operating loss. Television operating income declined in the current quarter due to production and marketing expenses associated with new network and made-for-syndication television shows.

In the electronics division, revenues were up 12.1 percent to $11.7 billion, but operating income fell 71.4 percent to $68 million. Revenues at Sony Ericsson rose 42 percent to 2.9 billion euros, and net income more than doubled to 298 million euros. The gaming division saw revenues drop 20.5 percent to $1.4 billion, delivering an operating loss of $369 million.