Sony on Thursday unveiled an increase in first-quarter profit for the first time in four years on the back of a favourable exchange rate and a boost to its flat-panel TV sales from the World Cup soccer season.
The consumer electronics group, which is undergoing a tough restructuring plan to revive its electronics business, said sales rose 11 per cent to Y1,568bn ($13.6bn), and operating profit rebounded to Y27bn for the first three months, compared with a Y6.6bn loss previously.
It was also the first time in two years that Sony has reported a profit in the first quarter, with net profit recovering to Y32.3bn, compared with a loss of Y7.3bn a year earlier.
Although TV sales grew 40 per cent during the World Cup, this was less than expected, leading to a rise in inventories and leaving the TV division still in the red.
Nonetheless, Nobuyuki Oneda, chief financial officer, said the boost in demand was enough to help Sony make progress towards turning round its TV business. It also helped push the group’s LCD flat-panel production joint venture with South Korea’s Samsung into profit in the first quarter.
“There is no change to our plan to return to the black [in the TV business] in the second half of the fiscal year,” he said.
Among other star performers, the Vaio PC held up well, while Sony Ericsson mobile phones showed a 41 per cent jump in sales and a 91 per cent surge in net profit.
Sony Ericsson’s Walkman phones were particularly popular, helping to increase net unit shipments by 33 per cent. The group now has the fourth-largest market share in the world, it said.
Sales in the Sony Pictures division rose 42 per cent, helped by the success of The Da Vinci Code. But the unit reported an operating loss in the first quarter because of higher marketing costs.
On the negative side, Sony’s games division reported a Y26.8bn operating loss, mainly because of charges associated with the launch of the PS3, slow sales of the PlayStation 2 after six years on the market, and a less-than-scintillating performance by its handheld console, the PSP.
Mr Oneda acknowledged that the PSP was struggling in the face of stiff competition from Nintendo’s DS handheld console.
Sony revised up its sales and operating profit outlook to Y8,230bn and Y130bn, respectively, because of a reclassification of royalties. However, the new operating profit forecast is still significantly down from the Y190bn reported last year.
■ Separately, Canon on Thursday raised its full-year operating profit forecast to Y690bn from Y686bn because of strong demand for its digital single-lens reflex cameras, as it unveiled a 33 per cent rise in first-quarter operating profit to Y168.3bn. Sales rose 13 per cent to Y1,030bn.
Fujitsu and NEC, meanwhile, reported firm operating profit in the first half, helped by strong demand from the rest of Asia.
Fujitsu reported record first-quarter sales of Y1,102.8bn and increased its first-half operating profit by 75 per cent to Y35bn.
NEC unveiled Y14.7bn profit in the first quarter because of better-than-expected sales of mobile-phone base stations.