MUMBAI: Japanese media conglomerate Sony has posted a 17.5 per cent increase in third quarter net profit, to $1.4 billion, on revenues of $20.1 billion. This marks a 10.2 per cent increase for the October to December 2005 period.
Sony's management, led by the CEO Howard Stringer had cut a number of product lines in a bid to restore profits, which have been hammered by competition from lower-cost producers in Asia
The company also reversed its fiscal year forecast to a profit from a loss. Sony revised its earnings forecast for the year ending 31 March, 2006, to $608 million profit on $64.3 billion sales. It had earlier expected a loss of $86.9 million on $63 billion sales.
The electronics division was the main reason for Sony's strong performance. Operating profit increased by 56 per cent to $668 million. Sony's move to work with rival Samsung on developing LCD's is paying off. Sony also decided to stop making Plasma screens. The gaming division saw profits up by 52.1 per cent to $575 million). However the movie division did not fare so well. Sony Pictures posted a loss of $3 million after the disappointing performances of films like Zathura.
Sony executive VP and CFO Nobuyuki Oneda was quoted in media reports saying that the results were boosted in part by a weaker yen and the stock market's rally, and it is still uncertain whether this favourable business situation will continue. A weaker yen helps lift Sony's earnings overseas, while its financial service operations benefit when stocks rise.