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).
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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/
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