Sony’s Q3 Results

A week ago Nikkei were reporting that Sony would post a quarterly profit today for the first time in five quarters.  Sony’s results were published at 06:00 GMT this morning, so we now know whether Nikkei were correct.

The great news for Sony is that Nikkei were right.  For the third quarter of Sony’s 2009 financial year, which ran from 1st October through to 31st December, Sony have posted an operating income (profit) of 146.1 billion yen.  At the time of writing the exchange rate is £1 to ¥144.47 so that is a profit for the quarter of £1.011 billion.  That operating income is in contrast to the operating loss of ¥18 billion (£124.6m) in Q3 2008.


So which parts of Sony have helped its figures so far back into the black?  Their Consumer Products and Devices segment, which makes Bravia TVs, cameras, etc., saw a 10% decease in sales but reported a profit of ¥49.4b (£342m) for the quarter, compared to a ¥19.8b loss in Q3 2008.  Strong Blu-ray disc sales helped Sony’s B2B & Disc Manufacturing segment increase its profit from ¥8.3b last year to ¥10.1b (£70m) this year.

Sony Pictures’ profit modestly increased from ¥12.9b to ¥14.1b (£97.6m) with Michael Jackson’s This Is It being singled out for its “strong worldwide theatrical performance”, while Did You Hear About The Morgans? was singled out for its “underperformance”.  Angels & Demons and Terminator Salvation were noted for strong home entertainment sales.

Sony Music, despite “the continued decline in the physical music market”, improved from ¥21.4b to ¥23.1b (£160m) thanks partly to best-selling albums such as Susan Boyle’s I Dreamed A Dream, Michael Jackson’s This Is It and Alicia Keys’ The Element of Freedom.  Their Financial Services segment saw the biggest turn around going from a ¥37.4b loss to a ¥35b () profit.  While Sony Ericsson continued to hemorrhage cash reporting a €159m (£138m)loss, which admittedly is better than the €183m loss from a year ago.

It is the Networked Products & Services (NPS) segment that most interests us though as that is where the PlayStation brand lives.  While it only recorded a 1.9% growth in sales, NPS turned last year’s ¥5.9b loss into a ¥19.4b (£134m) profit.  Do not get too excited for PlayStation though as that sales value increase comes mainly thanks to Sony’s Vaio PCs which saw increased sales worldwide.

Sony’s game business actually saw a 3.9% fall in sales from ¥370b to ¥355b (£2.4b).  Sony lists the main reasons for that fall as a decline in unit sales of PS2 hardware (2.1m vs. 2.5m in Q3 2008) and software, which as the PS2 approaches its tenth anniversary in March, cannot have come as too much of a surprise, as well as a fall in sales of PSP hardware (4.2m vs. 5.1m).

The PlayStation 3, thanks to the price cut and the launch of the PS3 Slim, saw a 44% increase in unit sales from 4.5m in Q3 2008 to 6.5m this year.  In the face of the declining sales of the PS2 and PSP, the PS3 meant Sony’s game business’ profitability was relatively unchanged due to the reduced cost to Sony of making each PS3 compared to a year ago.

The forecast for PS3 sales is unchanged from their October forecast of 13m units, compared to the 10.1m they sold during the 2008 financial year.  Forecast PS2 sales have actually been revised upwards to 7m from October’s 5m.  Compare that to the 7.9m sold in 2008 and you can see that the PS2 is still doing very well for such an old console.  It is hard to believe its recent launch into new territories such as Brasil and Vietnam is solely to blame for its continued strong sales.

The PSP sales forecast has been substantially reduced from a predicted 15m sales in October to just 10m now, compared the to 14.1m sold in 2008.  Guess the PSPgo really is not selling as well as they hoped, though unfortunately they do not separate out PSP and PSPgo sales.  PlayStation software unit sales have also had their forecast reduced from 240m in October to 200m now, in comparison to sales of 237.5m in 2008.

We will be back later with more news on Sony’s and PlayStation’s financial and sales performance once all the analyst conference calls have taken place and we have had a chance to sift through them for any PlayStation-related nuggets.

Note: In the above article one billion equals 1,000 million.