Sony profits hit by falling TV prices, strong yen

Stiff price competition in the flat-screen TV market and the strong Japanese yen hurt profits at Sony in the last three months of 2010, the company said Thursday.

Net profits at the consumer electronics giant dropped 8.6 percent on the same period a year earlier to ¥72.3 billion (US$886 million) as sales fell 1.4 percent to ¥2.2 trillion.

The lower sales came primarily as a result of the strong yen, which has been hitting Sony and other Japanese exporters all year. In the last year, the yen has appreciated 9 percent against the U.S. dollar and 18 percent against the Euro making the price of Sony goods more expensive outside of Japan, and reducing the profit made on each item sold.

Sony's consumer, professional and devices division, which includes its TV business, saw profits plunge 47 percent as the company was forced to cut the price of LCD televisions to match competitors. Ironically, the lower prices helped Sony increase sales of TVs from 5.4 million in the last three months of 2009 to 7.9 million in the same period of 2010.

Sony isn't alone in feeling the effects of falling TV prices. Panasonic, its biggest domestic competitor, said Wednesday that its TV business recorded losses during the quarter on steep price declines. Samsung and LG Electronics, which together with Sony and Panasonic account for more than half of all flat-screen TV sales, were also impacted by lower prices for televisions.

A slowdown in demand for its PlayStation 3 console and PlayStation Portable hit sales at its networked products and services division, which fell 6 percent. Sony shifted 6.3 million PS3s during the quarter, down from 6.5 million during the year-earlier period. PSP sales dropped from 4.2 million units to 3.6 million units.

But the lower sales didn't dent profits. Reductions in the cost of PS3 components meant Sony saw profits at the division surge 135 percent.

Looking ahead, Sony cut its sales forecast for the full financial year, which ends on March 31. Lower-than-expected sales in its consumer division are expected to bring full year sales in at ¥7.2 trillion, which is down 3 percent from its previous forecast but broadly in line with actual sales the year before. Sony kept its profit forecasts unchanged.

Martyn Williams covers Japan and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is martyn_williams@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags business issuessonyfinancial resultsconsumer electronicsSony Computer Entertainment

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Martyn Williams

IDG News Service
Show Comments

Father’s Day Gift Guide

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?