Sony's Profits Rise; Sales Drop
Jan. 27, 1999
TOKYO (AP) _ Sony Corp.'s profits rose 2 percent in its fiscal third quarter on a special accounting gain, but operating profits tumbled as global economic weakness hammered its main electronics business.
Sony reported Wednesday it earned 112.31 billion yen, or $968.3 million, in the three months ended Dec. 31, aided by a special gain of 58.7 billion yen related to an employee benefits plan. Sony earned 110.37 billion yen in the same period a year earlier.
Excluding the one-time accounting boost in the recent quarter, Sony's operating profits dropped 20 percent. Sales fell 3 percent to 1.95 trillion yen, or $16.79 billion, from 2.01 trillion yen.
Economic problems hurt electronics sales in Latin America, Russia, Eastern Europe and other parts of Asia. Sony also suffered from intense price competition in the United States and Western Europe.
Best known for TVs and its Walkman stereos, Sony has branched out in recent years and now makes computers, cellular phones and semiconductors.
Operating profits from electronics dropped 49 percent in the quarter, offsetting gains in Sony's other divisions _ films, music, video games and insurance.
Sony Pictures improved profits despite lower revenue, as strong home-video sales offset a lack of strong box-office releases. Music profits were boosted by releases from Mariah Carey, Celine Dion and George Michael. The games division benefited from strong sales of the PlayStation video game machine.
The weak electronics market caused Sony to further cut its profit forecast for the full year ending March 31. Sony expects profits to drop 28 percent to 160 billion yen, which is down from the forecast of 170 billion yen Sony released three months ago.
For the first nine months of its fiscal year, Sony's profits fell nearly 2 percent to 198.37 billion yen, or $1.7 billion, while sales climbed 5 percent to 5.32 trillion yen, or $45.83 billion.