Sony Revises Upward FY '07 Earnings Estimates

Oct 25, 05:21 PM

Current Headlines: Tokyo, Oct. 25 (Jiji Press)--Sony Corp. on Thursday revised upward its group earnings estimates for fiscal 2007, as it plans to report profits from proceeds from the stock listing of its financial subsidiary, Sony Financial Holdings Inc. , in October-December.

"Proceeds from the stock listing of Sony Financial will push up Sony's October-December net profit by about 11 billion yen, and pretax profit by around 75 billion yen," Sony Chief Financial Officer Nobuyuki Oneda said at a press conference at the Tokyo Stock Exchange.

As a result, Sony expects to report a group net profit of 330 billion yen for the full year to March 2008, up from an earlier projected 320 billion yen. Operating profit is now projected at 450 billion yen, up from 440 billion yen, on sales of 8.98 trillion yen, up from 8.78 trillion yen.

Sony Financial, established in 2004, controls Sony Life Insurance Co., nonlife insurer Sony Assurance Inc. and Internet bank Sony Bank. Sony currently has a 63 pct stake in Sony Financial, which went public on the TSE's first section on Oct. 11.

Also behind the upward revision were better-than-expected performances in the July-September fiscal second quarter, Oneda said.

Sony reported the same day that sales in the latest quarter grew 12.3 pct to 2,083 billion yen, and net profit jumped 43.4-fold to 73.7 billion yen, both record highs for the fiscal second quarter, thanks to robust sales of such products as VAIO personal computers, Cyber-shot digital cameras and BRAVIA liquid crystal display televisions.

A profit of 60.7 billion yen from the sale of land that was the site of the company's former headquarters also contributed to the robust quarterly earnings.

By sector, operating profit from the core electronics division soared 13.4-fold to 106.9 billion yen. The figure grew significantly because the company reported a loss of 51.2 billion yen during the same period in the previous year for costs related to recalls by notebook PC makers involving faulty lithium-ion battery packs made by Sony. Sales from the sector grew 20.7 pct to 1,663.1 billion yen.

The game division incurred an operating loss of 96.7 billion yen, larger than the year-before loss of 43.5 billion yen, due primarily to below-cost prices set for the PlayStation 3 game console, as well as appraisal losses on PS3 inventories. But sales from the division grew 42.9 pct to 243.4 billion yen, thanks to robust sales of the PS3 game machines.

The pictures division generated an operating profit of 2.7 billion yen, in a turnaround from the year-before loss of 15.3 billion yen, on sales of 189.6 billion yen, up 6.4 pct. The movie that most contributed to the sector during the reporting quarter was "Superbad," Sony said.

The financial services division generated an operating profit of 23.1 billion yen, down 5.8 pct, on sales of 157.5 billion yen, down 6.3 pct. [EARNINGS]END

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