Sony Corp. said Thursday its operating profit dropped 13 percent on a year-on-year basis to 138.2 billion yen in the October-December period, dragged down by weak sales of conventional televisions and portable audio products.

Katsumi Ihara, the firm’s chief strategy officer, told a news conference that Sony will rejuvenate its core consumer electronics business by boosting its display operations, focusing on liquid crystal display TVs and rear-projection TVs.

During the third quarter of fiscal 2004, revenue was down 7.5 percent to 2.15 trillion yen. Net profit in the period jumped 55 percent to 143.8 billion yen, though this was mostly due to lower tax expenses in the United States.

The company has suffered amid a lackluster performance by its consumer electronics business. It has increased its dependence on blockbusters in its film division.

For the October-December quarter, the film division continued to post solid growth, thanks to strong sales of DVD and VHS titles, including “Spider-Man 2” and “Seinfeld,” as well as the movie “The Grudge.”

During the same period, the electronics segment saw its operating profit drop by 23 percent to 49.4 billion yen, hurt by steep price falls. The sales decline was especially acute in Japan, where the company saw weak demand for Vaio personal computers and cathode-ray tube TVs.

Its game division also fared poorly, with solid software sales failing to offset a drop in sales of PlayStation 2 game consoles.

The firm said the PlayStation Portable, released in December, has seen robust demand, with half a million units shipped by the end of 2004.

The company announced a week earlier that it had slashed its full-year operating profit forecast from 160 billion yen to 110 billion yen, blaming worse-than-expected price declines for TVs, DVD recorders and video cameras.

The firm’s management, headed by Chief Executive Nobuyuki Idei, has been under growing pressure to convince investors it can deliver on its promise to achieve an operating profit margin of 10 percent in fiscal 2006.

“The firm should present some kind of update on how it can achieve that goal,” said Koya Tabata, analyst at Credit Suisse First Boston Securities (Japan).

In Sony’s revised forecast for the current fiscal year, the operating profit margin stands at just 1.5 percent.

During Thursday’s news conference, Ihara said the company had made solid progress in implementing measures to achieve targets in its business plan, adding that he has no additional restructuring plans.

But Kazuharu Miura, an analyst at Daiwa Institute of Research, said Sony’s restructuring efforts were inadequate, with the company having left loss-making operations untouched.

“The most shocking thing in Sony’s downward revision (last week) was that, although it spent some 270 billion yen on restructuring for two years, it has not yet seen its benefit.”

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