Sony Corp. and Matsushita Electronic Industrial Co. presented starkly different earnings reports Thursday as sales of flat-screen televisions altered the fortunes of the rival consumer electronics makers.
Sony reported a 7.26 billion yen net loss for the three-month period ending in June, forcing it to drastically cut its full-year earnings forecast from 160 billion yen to 30 billion yen.
“With falling prices and a smaller-than-expected volume of sales, the performance of the TV business is expected to worsen,” Nobuyuki Oneda, Sony’s chief financial officer, told a news conference.
He warned that the company will probably cut its forecast further when new CEO Howard Stringer announces a sweeping groupwide restructuring plan in September.
The 7.26 billion yen net loss for the three-month period came on revenue of 1.56 trillion yen.
Sony’s mainstay electronics business was dragged down by a sharp drop in sales of traditional cathode-ray tube TVs and plasma display panel TVs. Sales of liquid crystal display TVs grew, but rapid falls hurt profits, the company said.
“I think there have been problems with the attractiveness of our products,” Oneda said about the struggling TV business. “We have not been able to introduce products in a timely fashion to counter price falls.” He said the firm will revamp TV operations.
The company’s game business showed strong sales growth thanks to robust demand for its new hand-held game console, the PlayStation Portable.
But losses at the game unit widened as it spent heavily on promotional activities and research and development for the next-generation console.
Meanwhile, rival Matsushita said it has raised its forecast for the first half through September, buoyed by better-than-expected sales of PDP TVs.
Matsushita now expects an operating profit of 130 billion yen, up from the 120 billion yen initially projected.
During the first quarter, the Osaka-based maker’s net profit grew 2 percent to 33.44 billion yen on revenue of 2.05 trillion yen, down 3 percent.
Sales of PDP TVs jumped 72 percent to 78.1 billion yen. The company said the price of PDP TVs fell by 20 percent to 30 percent from a year earlier, but a sharp increase in volume, which nearly doubled, more than offset that.
It said sales of other items, including digital cameras and air conditioners, also posted solid growth.
The two rivals’ contrasting results highlighted the growing importance of flat-screen TVs to consumer electronics makers and Sony’s continuing struggle to ride the trend.
Sony — maker of Trinitron TVs — has been slow in embracing the industry’s shift to flat-screen TVs, getting display panels from its rivals.
Matsushita has meanwhile been making aggressive investments in its PDP-production facilities. Matsushita officials attribute its strong PDP business to its ability to make its own vital components.
Sony hopes a joint-venture with Samsung Electronics Co. to produce LCDs will give its business performance a much-needed uplift.
“From now on, we’ll be able to use Sony panels, which will boost our cost competitiveness,” Sony’s Oneda said.
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