Sony Q2 Profits Plunge, Revenue Rises
A couple weeks after revising its annual profit forecast, Sony has officially reported their income for the second quarter ending on September 30. Unfortunately, as most analysts expected, the results hold some nasty news.
Sony's net profit for the second quarter plummeted to a mere 1.7 billion yen ($14.36 million), which is a gigantic fall from the 28.5 billion yen ($240.8 million) posted for last year's 2Q. Strangely enough, though, overall revenue for this year's quarter actually rose 8% to 1.85 trillion yen ($15.6 billion) from the reported 1.7 trillion yen ($14.4 billion) a year earlier.
Well, one major factor impacting the results is Sony's recall of 9.6 million laptop batteries, which cost the company a whopping 51 billion yen ($429 million). Another big issue was the gaming division, which suffered 43.5 billion yen ($367.5 million) operating loss for the quarter. To top it all off, there were declining international sales of the PS2 and PSP, despite Sony producing more units than last year.
The company stated that its profit loss was due to "recording of charges associated with preparation of launch of the PS3 platform and the continued high research and development costs associated with the PS3."
Sony has changed their predictions for the full fiscal year now, and they currently expect 80 billion yen ($674 million). That's 38% lower than the 130 billion yen ($1.1 billion) net profit they had anticipated at the end of July. But at the same time, they expect overall annual revenue to rise 10% to 8.23 trillion yen ($69.5 billion).
Big business is a truly crazy world.
10/26/2006 Ben Dutka