SOURCE: Sony Corp

January 31, 2008 01:10 ET

Sony Corporation announces 3rd Quarter Results

Tokyo, Japan--(Marketwire - January 31, 2008) -

                                    Sony Corporation
                                    1-7-1 Konan, Minato-ku
                                    Tokyo 108-0075 Japan

                                    No: 08-011E
                                    3:00 P.M. JST, January 31, 2008

                     Consolidated Financial Results
              for the Third Quarter Ended December 31, 2007
Tokyo, January 31, 2008 -- Sony Corporation today announced its consolidated results for the third quarter of the fiscal year ending March 31, 2008 (October 1, 2007 to December 31, 2007).
(Unaudited, Billions of yen, millions of U.S. dollars, except per share
amounts)
                                     Third quarter ended December 31
                                                  Change 
                           2006         2007      in yen       2007*
                        -------      -------     -------     -------
Sales and operating    Y2,607.7     Y2,859.0        +9.6%    $25,079
 revenue
Operating income          178.9        189.4        +5.8       1,661
Income before income      179.8        288.5       +60.4       2,530
 taxes
Equity in net income       43.0         46.9        +9.0         411
 of affiliated 
 companies
Net income                159.9        200.2       +25.2       1,756

Net income per share
 of common stock
  - Basic               Y159.70      Y199.60       +25.0       $1.75
  - Diluted              152.49       190.29       +24.8        1.67
Unless otherwise specified, all amounts are presented on the basis of Generally Accepted Accounting Principles in the U.S. ("U.S. GAAP").
* U.S. dollar amounts have been translated from yen, for convenience
  only, at the rate of    Y114=U.S.$1, the approximate Tokyo foreign 
  exchange market rate as of December 31, 2007.

Consolidated Results for the Third Quarter Ended December 31, 2007
------------------------------------------------------------------
-    New quarterly records were achieved for consolidated sales and operating 
     revenue, income before income taxes, equity in net income of affiliated 
     companies and net income.

-    In the Electronics segment, Sony recorded double-digit sales growth 
     compared with the same quarter of the previous fiscal year 
     ("year-on-year"). After achieving record operating income in the same 
     quarter of the previous fiscal year, Sony achieved its second highest 
     Electronics segment profit level in history.

-    In the Game segment, the PS3 platform expanded on a worldwide basis with 
     PS3 hardware sales of 4.90 million units.
Sales and operating revenue ("sales") increased 9.6% year-on-year.

Electronics segment sales increased 10.2% year-on-year due to the increase in sales of products such as BRAVIA™LCD televisions. In the Game segment, sales increased 31.2% year-on-year primarily as a result of the contribution to sales from PLAYSTATION®3 ("PS3"). In the Pictures segment, there was a 24.6% decrease year-on-year in sales primarily due to a decrease in film revenues in both the theatrical and television markets. In the Financial Services segment, revenue decreased by 21.4% year-on-year mainly due to deterioration in net valuation gains from convertible bonds in the general account and in net gains from investments in the separate account and partially offset by an increase in insurance premium revenue at Sony Life Insurance Co., Ltd. ("Sony Life").

On a local currency basis, sales increased 9% year-on-year. For references herein to sales on a local currency basis, see Note.

Operating income increased 5.8% year-on-year.

In the Electronics segment, although an increase in sales and the depreciation of the yen against the euro impacted positively on operating income, operating income decreased year-on-year, primarily due to declining prices which exceeded cost improvements. In the Game segment, operating income was reported as compared to an operating loss in the same quarter of the previous year primarily due to a significant decrease in the operating losses of the PS3 business as a result of successful PS3 hardware cost reductions. In the Pictures segment, operating income decreased due to the relative underperformance of films released theatrically in the current quarter as compared to those released in the same quarter of the previous year, as well as lower revenues from films released in the television market. In the Financial Services segment, an operating loss this quarter was mainly attributable to deterioration in net valuation gains from convertible bonds at Sony Life as a result of the rapid deterioration in Japanese stock market conditions.

Restructuring charges of Y11.2 billion ($98 million) were recorded as operating expenses this quarter. (A credit to restructuring charges of Y0.3 billion was recorded in the same quarter of the previous fiscal year due to the recording of a gain of Y3.6 billion on the sale of assets associated with restructuring activities.) Substantially all of these restructuring charges in both periods relate to the Electronics segment.

Operating income during the current quarter included a gain from the reversal of a portion of a legal provision as a result of the resolution of a pending legal matter, while a comparable gain was recorded in the same quarter of the previous fiscal year attributed to the reversal of a portion of patent-related provisions.

Income before income taxes was Y288.5 billion ($2,530 million), a year-on-year increase of 60.4%. This was mainly due to an improvement of Y98.2 billion in the net effect of other income and expenses. The improvement in the net effect of other income and expenses was due to the recording of a gain of Y81.0 billion ($711 million) for the change in ownership interest in subsidiaries and investees as a result of the global initial public offering of shares of Sony Financial Holdings Inc. ("SFH") in connection with the listing of shares of SFH on the First Section of the Tokyo Stock Exchange in October 2007, and the recording of a net foreign exchange gain in the current quarter versus a net foreign exchange loss recorded in the same quarter of the previous fiscal year.

Income taxes: During the current quarter, Sony recorded Y135.2 billion ($1,186 million) of income taxes resulting in an effective tax rate of 46.9%.

Equity in net income of affiliated companies increased 9.0% year-on-year to Y46.9 billion ($411 million). Sony recorded equity in net income for Sony Ericsson Mobile Communications AB ("Sony Ericsson") of Y30.4 billion ($266 million), a decrease of Y3.2 billion year-on-year due to a lower effective tax rate in the prior year. Sony also recorded equity in net income of Y11.5 billion ($101 million) for SONY BMG MUSIC ENTERTAINMENT ("SONY BMG"), a year-on- year decrease of Y1.6 billion, primarily due to a benefit from an industry- related legal settlement recorded in the same quarter of the previous fiscal year. Equity in net income of Y3.1 billion ($27 million) was recorded for S-LCD Corporation ("S-LCD"), a joint-venture with Samsung Electronics Co., Ltd., a year-on-year increase of Y2.5 billion.

Sony did not record any equity gain or loss for Metro-Goldwyn-Mayer Inc. ("MGM") in the current quarter compared to equity in net loss of Y5.4 billion recorded in the same quarter of the prior fiscal year. As of March 31, 2007, Sony no longer has any book basis in MGM and accordingly, no additional losses are recorded.

As a result of the changes in the items discussed above, net income increased 25.2% year-on-year, to Y200.2 billion ($1,756 million).


To view the full document, please paste the following URL into the address bar 
of your browser:

http://www.rns-pdf.londonstockexchange.com/rns/8338m_-2008-1-31.pdf


Investor Relations Contacts:
---------------------------


Tokyo                   New York                      London
Tatsuyuki Sonoda        Sam Levenson/Justin Hill/     Shinji Tomita
                        Miki Emura
+81-(0)3-6748-2180      +1-212-833-6722               +44-(0)20-7444-9713

Home Page: http://www.sony.net/IR/



                      This information is provided by RNS
            The company news service from the London Stock Exchange