Sony Corp reported a quarterly profit gain thanks to the "Spider-Man 2" hit movie while Panasonic products maker Matsushita Electric Industrial Co benefited from bumper sales of flat-panel TVs, but both companies left their full-year forecasts unchanged.
Matsushita almost doubled its quarterly operating profit, upstaging a 31-percent gain by archrival Sony. The results exceeded analysts' expectations, but Sony cut its full-year sales forecast by 3 percent and Matsushita warned about the effects of record crude oil prices on the global economy.
"High oil prices, high raw materials prices and a strong yen. These factors have made the outlook for the second half unclear," Matsushita President Kunio Nakamura said at a briefing. "It is better to take a cautious stance." Armed with a line-up of new plasma televisions, DVD recorders and digital cameras, Matsushita was in a better position than Sony to capitalise on demand for consumer electronics in the run-up to the Olympic Games in August.
Sony, in contrast, positioned its product launches closer to the year-end shopping season and was unable to capitalise on Japan's extremely hot summer like Matsushita, which boosted output of air conditioners to meet a surge in demand.
Sony maintained its full-year estimate of a 62 percent jump in operating profit to 160 billion yen ($1.5 billion) but cut its sales outlook to 7.35 trillion yen from 7.55 trillion yen. The company raised its net profit outlook 10 percent to 110 billion yen to reflect gains in equity income and stock sales.
Katsumi Ihara, Sony's executive deputy president, was cautiously optimistic on the electronics business in the third quarter to December 31, when the company earns the lion's share of its annual profits due to holiday season sales.
"While we don't know how we will do until it's over, we've been constantly introducing new products and they've been well received. We have big expectations," he said.
Sony President Kunitake Ando said last month he did not expect a sharp recovery in its home electronics business in the key October to December quarter, citing high costs to develop flat-panel TVs and a deteriorating market for home audio goods.
"Flat screen TVs have a high retail price and it is a big market. We have to be strong in this area or Sony's AV (audio-visual) business is not going to recover," Ihara said.
Matsushita also left its full-year estimate unchanged, forecasting a 43 percent rise in operating profit to 280 billion yen on an 18 percent sales gain to 8.8 trillion yen.
Sony notched up a 31 percent rise in operating profit in July-September, but that relied heavily on its volatile movie division, which swung back into the black because of "Spider-Man 2", which has made $781 million at the box office world-wide.
The conglomerate's electronics business, which accounts for roughly two-thirds of group revenues, logged an 83 percent decline in operating profit due to a strong yen and a decline in prices of DVD recorders, video cameras and flat-panel TVs.
Sony posted a group operating profit of 43.4 billion yen, against a profit of 33.2 billion yen in the same quarter last year. It was a tad above an average forecast of a profit of 41 billion yen, according to four analysts polled by Reuters.
Revenues fell 5.3 percent to 1.702 trillion yen, hurt by a firm yen and a decline in inter-segment sales from outsourcing production of the PlayStation 2 game console. The establishment in August of SonyBMG, a music joint venture formed with Germany's Bertelsmann, also had a negative impact on group sales because Sony began accounting for the venture under the equity method.
Sony lowered its full year sales outlook for semiconductors by 10 percent to 470 billion yen due to sluggish demand for charge-coupled devices (CCD), image-capturing chips used in digital cameras. Sony is the world's largest maker of CCDs.
In a sign of softening demand in the industry, Sanyo Electric Co Ltd on Thursday lowered its digital camera production target for the current business year by over 20 percent, citing rising inventories and waning demand.
On a net basis, Sony recorded a profit of 53.2 billion yen, compared with 32.9 billion yen a year before. Equity income got a boost from a surge in profits at Sony Ericsson, a mobile phone joint venture with Sweden's Ericsson. Quarterly profit at Matsushita jumped 89 percent in the three months to 112.9 billion yen, the result of strong sales of flat panel TVs, digital cameras, air conditioners, washing machines and semiconductors for digital consumer goods.
The result handily beat an average forecast of an operating profit of 84 billion yen, according to four analysts polled by Reuters. It also gave Matsushita an operating profit margin of 5.1 percent, the highest in 13 years.
Matsushita's sales in the quarter rocketed up 18.7 percent to 4.32 trillion yen, boosted by the inclusion of building materials and lighting equipment unit Matsushita Electric Works (MEW), which became a 51 percent owned subsidiary in April.
Matsushita's net profit in the second quarter rose 14 percent to 23.4 billion yen, depressed by a disappointing performance by unit Victor Co of Japan Ltd (JVC), which lost money in the first half due to weak camcorder sales.
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