Sony earned sharply higher net profits in the financial year just ended on the back of stronger sales, but missed an already-lowered operating profit target, it said Wednesday.
The company reported net profits of ¥369 billion (US$3.5 billion) for the year to March, with sales up 7 percent to ¥8.9 trillion, which represents a new record for Sony. Net profit was significantly boosted thanks to restructuring steps that saw Sony sell several buildings, including the Sony Center in Berlin, and a portion of its former headquarters building in Tokyo.
Operating profit, which more closely measures the profitability of Sony's core electronics operations and excludes most non-core and one-time gains and charges, was ¥374 billion, more than four times that reported in the previous year, but less than Sony's target of ¥410 billion. Sony had originally forecast an operating profit of ¥440 billion but revised it down three months ago.
In Sony's core electronics business sales rose 9 percent and operating profits surged 122 percent, although the profit jump was primarily as a result of the depreciation of the yen against the euro.
Sales and profits from the Cybershot digital still camera and Vaio computer businesses rose but while Sony saw higher sales of Bravia LCD (liquid crystal display) televisions, profitability worsened due to lower retail prices and fierce competition.
Sony was late to the LCD TV market, but sales of its Bravia sets have been taking off in recent years. In the year to March Sony sold 10.6 million TVs, up from 6.3 million last year.
This year it expects sales to hit 17 million units and hopes to expand its market by using cheaper panels in low and mid-market sets where price competition is greatest. These panels will be sourced from other companies while Sony will continue to make its own panels for high-end models. Additionally Sony will also reduce the number of TV chassis used across its range from five to two to realize greater efficiency in manufacturing.
Games sales rose 26 percent as the popularity of the PlayStation 3 and PlayStation Portable took off. The business remained in the red for the year but losses were cut from ¥232 billion to ¥124 billion. Sony said it expects the games business to return to profit in the current year.
For the current fiscal year Sony expects sales to rise by 1 percent to ¥9 trillion [t], operating profit to climb to ¥450 billion and net income to be ¥290 billion.
Sony Corp. Fiscal Year 2007 Earnings Table
Fiscal year 2007
Fiscal year 2006
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