Sony Reports Fiscal First Quarter Loss, Dimmer Profit Outlook26 Jul, 2001 By: Hive News
Japanese consumerelectronics and entertainment giant Sony Corp. posted a big loss for the latest quarter due to a slump in its electronics, video game and movie businesses and slashed its earnings forecast for the full year, according to the Associated Press.
Sony added that stagnant worldwide demand, rising inventories and falling prices will likely hurt its business for the rest of this year.
The company lost $244 million in its fiscal first quarterended in June. That was smaller than the loss for the same period a year ago. However, the year-ago loss was caused mainly by a one-time charge related to a change in U.S. accounting standards, said the AP report.
Sales for the first quarter climbed 4.6% to $13.3 billion from 1.57 trillion in the same quarter last year.
Despite the sales increase, the maker of PlayStation videogame consoles posted operating losses in half of its six main product linesincluding electronics, video games and movies.
Group operating profit for the first quarter tumbled 90% on year to $24.3 million, partly because of $106.1 million) in costs related to a recent recall of more than one million faulty Sony mobile phone handsets in Japan.
"Conditions in the economic environment in which Sony operates became more difficult, reflecting economic slowdowns in major regions such as the United States, Europe, Japan and Asia," the company said in a statement.
Electronics sales were down because of lower consumer demand and falling prices in major markets such as the United States, Europe, Japanand Asia, Sony said.
It sold fewer computer displays, CRT-based televisions, CD-R/RW drives, and mobile phones, but more video cameras, PCs and MemoryStick recording media.
Sales in Sony's games business rose about 29% overall, thanks in part to appetite for PlayStation2 hardware and software in the United States and Europe, but an operating loss wasrecorded, primarily because of PlayStation2 hardwaremanufacturing-related expenses.
Sony Pictures Entertainment sales increased about 9%, primarily on the carryover from last year's films, including Crouching Tiger,Hidden Dragon and Vertical Limit, higher home entertainment andinternational syndication revenues and continued growth of third-party home entertainment DVD sales, according to the AP.
Sony on Thursday slashed its profit outlook for the fiscal year through March 2002 to $728.9 million from its April forecast of $1.2 billion.