Sony Corp posted a 15 percent fall in quarterly operating profit on Tuesday after massive losses at its game unit offset robust sales of flat TVs, but it raised its annual outlook closer to market expectations.
Sony, which vies with Samsung Electronics Co and Sharp Corp in the $63 billion liquid crystal display (LCD) TV market, enjoyed brisk demand for its Bravia flat panel televisions as well as for Cyber-shot digital cameras.
But gains in its mainstay electronics division were cancelled out by hefty losses at its game unit, which was weighed down by heavy start-up costs for its new PlayStation 3 (PS3) game console and sluggish demand for PlayStation Portable (PSP) handheld gear.
"It's a positive development that the company increased profits on electronics even as their prices fell during the holiday sales period," said Mizuho Investors Securities analyst Mitsuhiro Osawa. "Of course we cannot ignore the game machines.... It's too early to say Sony has been reborn."
The basic model of the PS3, packed with a Blu-ray high-definition optical disc player and other cutting-edge technology, is priced twice as high as Nintendo Co Ltd's rival Wii console. But Sony still makes a loss on each PS3 it sells, leaving investors wondering if the game machine will eventually be a major profit driver or the biggest threat to its bottom line.
Sony raised its operating profit forecast by 20 percent to 60 billion yen ($490 million) for the full year to March, still short of a consensus of a 69.2 billion yen profit in a poll of 21 analysts by Reuters Estimates. The latest forecast compares with a 226.42 billion yen profit in the last business year.
Its annual net profit forecast, however, was raised by a larger 38 percent to 110 billion yen after a strong quarterly performance by its mobile phone joint venture with Ericsson, beating a consensus of 104 billion yen.
For October-December, operating profit came to 178.91 billion yen, down from 210.35 billion yen a year earlier. Net profit fell 5.3 percent to 159.92 billion yen, but sales rose 9.8 percent to a record 2.61 trillion yen.
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