Sony reports highest sales in company history

Sony Corp. achieved its largest consolidated sales in company history in the last fiscal year, it said Thursday. Aided by the weak yen and strong sales of its PlayStation 2 games console, the company said net sales totalled ¥7.6 trillion ($108 billion as of March 31, the end of the period reported) in the previous fiscal year, on a U.S. GAAP (generally accepted accounting practices) basis.

The figure represents a rise of 3.6 percent on the previous year, which was also, at the time, its best-ever year in terms of sales.

Sony's sales figures easily eclipse consolidated sales figures reported by other major Japanese electronics companies on Thursday; NEC Corp. said consolidated net sales fell 5.7 percent to ¥5.1 trillion, Toshiba Corp. reported a 9 percent fall to ¥5.4 trillion and Fujitsu Ltd. announced a 9 percent fall to ¥5.0 trillion.

Matsushita Electric Industrial Co. Ltd., traditionally Sony's biggest competitor in the consumer-electronics space, is due to report its earnings results on Friday. However the company's most recent predictions, issued in February, expect net sales of ¥6.8 trillion.

Healthy sales were tarnished by falling profits and consolidated net income dropped 8.6 percent to ¥15.3 billion. Still, the company did manage to keep its head above water unlike NEC, Toshiba and Fujitsu, which all reported consolidated net losses.

In terms of performance, Sony's most improved sector was its game business which saw a return to profitability as sales passed the ¥1 trillion mark. Much of this was due to the success of the PlayStation 2, of which Sony produced 18.1 million units and 121.8 million units of software in the year.

The launch of the console and associated development costs pushed the games business into a loss in the previous year, but this year, with those costs behind it, the division reported an operating profit of ¥82.9 billion. The PlayStation 2 business entered the "harvest stage" during the year, said Sony Chairman and Chief Executive Officer Nobuyuki Idei, in a statement. Sales of the console were strongest in the U.S. and Europe, the company said.

The healthy results were not repeated in the company's electronics division, which reported an operating loss of ¥8.2 billion on the back of sales of ¥5.3 trillion, a 3 percent drop from the previous year. However, measured on a local currency basis before the money is brought back into Japan, sales were down 10 percent on the previous year.

Sony named several areas in which performance was poor, including the company's semiconductor business, where sales fell 23 percent. Its electronics components and audio businesses also recorded lower sales. On the other hand, sales of Vaio personal computers jumped 16 percent while sales of Clie personal digital assistants, digital still cameras and projection televisions also increased.

Sony was helped by the weak yen, which makes the company's products cheaper overseas and also means that revenue from overseas sales are worth more when brought back home and converted into yen.

Looking ahead, Sony said it expects further improvement during the current year and forecast full-year consolidated sales will increase 6 percent to ¥8.0 trillion and net income will rise 880 percent to ¥150 billion.

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Martyn Williams

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