In Comeback for Japan, Sony Swings to a Profit


Sony said Thursday that it swung to a profit of 25.7 billion yen, or $294 million, in the April-June quarter, buoyed by a turnaround in its television and video game businesses.

The company’s chief financial officer said it was time for Sony to “go on the offensive” amid signs that a global economic recovery was finally pulling Japan’s electronics giants out of a long slump.

Sony also raised its outlook for the full year.

Japanese electronics companies, which in recent years have been falling behind rivals from South Korea and Taiwan in businesses like televisions and laptop computers, were hit hard in the global economic crisis as sales evaporated and a strong yen ate into profits.But a rebound in the global economy and solid growth in emerging markets, coupled with aggressive cost-cutting and restructurings, have started to raise their bottom lines.

Another Japanese electronics maker, Sharp, said Thursday that it had booked profit of 10.7 billion yen ($122 million) in the latest quarter, reversing big losses in the same period the previous year.

Since taking over as chief executive of Sony in 2005, Howard Stringer has trimmed costs at the struggling electronics and entertainment company while overhauling its sprawling businesses to better link its rich content to its gadgets. But profit has been elusive in Sony’s flagship television and video game units.

Those businesses are now back on track and should remain strong amid rising consumer interest in 3-D televisions and brisker sales of game consoles, said Masaru Kato, Sony’s chief financial officer.

Sony introduced 3-D models of its Bravia liquid-crystal display televisions last month. That could further lift sales of its LCD televisions, which rose 59 percent last quarter from the previous year to 5.1 million units.

Meanwhile, a new, slimmer version of its PlayStation 3 video game console and recent price cuts are expected to bolster sales in its game division. In the latest quarter, sales of the PlayStation 3 more than doubled from the previous year to 2.4 million units, while the PlayStation Portable hand-held console were steady at 1.2 million units.

Sony’s recovery in games compared with the fading fortunes at its rival Nintendo, which said Thursday it took a loss of 25.2 billion yen ($287 million), hurt by fewer releases of new software titles. Nintendo sold 3.15 million of its DS hand-held consoles during the quarter, compared with 5.97 million a year earlier, the company said.

Sales of the Nintendo Wii home console remained strong, however, rising to 3.04 million units from 2.23 million the previous year. Software sales fell for both the DS and Wii consoles.

At Sony, overall revenue in the quarter grew 3.8 percent to 1.66 billion yen ($18 million). The strong sales helped raise its profit outlook for the financial year that ends in March to 60 billion yen, from a previous forecast of 50 billion yen.

“We want to keep up the momentum, and go on the offensive,” Mr. Kato said. “Our results for the quarter show that our mainstay electronics business is once again becoming our engine of growth.”

Building on a similar revival in earnings, Panasonic said Thursday it had offered to take 100 percent ownership of two subsidiaries, Sanyo Electric and Panasonic Electric Works.

Panasonic, which agreed to buy a 50 percent stake in Sanyo in 2008, offered 138 yen ($1.57) for each Sanyo share, Panasonic said in a statement. The offer represents a premium of 17 percent from Wednesday’s closing price. Panasonic will also pay 1,110 yen ($12.65) a share for the 49 percent of the Panasonic Electric Works shares it does not own.

The purchases, for which Panasonic expected to sell new stock, could be good news for a company that analysts have said must focus on areas like green technology to combat competition from rivals like Samsung Electronics of South Korea and Sony in televisions and other gadgets.

“Panasonic may have a vast product portfolio but has realized that the most promising technologies are owned by subsidiaries,” said Takahito Osada, a research fellow at Kobe University. “It is now seeking to bring those technologies into the core company.”

But recovery is far from stable for Japan’s big electronics makers, Mr. Osada said. “They are rebounding thanks to a general economic recovery, more than their own efforts,” he said. “That’s something they can build on, but their outlook is still unclear.”

By HIROKO TABUCHI at New York Times


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Through out my years, Sony has been a passion of mine.

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