No more fun & games
PlayStation2, exchange rate dilute Sony's $$$
Net income plunged 32% to $1.15 billion and sales eased 1.7% to $63 billion. Excluding the currency hit, revenue rose 9%.
Sony Pictures, a relatively small piece of Sony’s business, saw revenue and operating income fall about 10% for the year. The unit cashed in on “Big Daddy,” “Blue Streak” and “Stuart Little” plus higher revenue from home video, DVD and international pay-TV. It also took unspecified losses on “What Planet Are You From?” “The Messenger: The Story of Joan of Arc” and “Random Hearts.”
Yen for figures
A strong yen, nearly 15% higher against the dollar and 25% higher versus the euro year-to-year, eroded the value of sales outside Japan -- two-thirds of Sony’s business. As a result, Sony also provides figures on a “local currency” basis, which neutralizes exchange rates. On that basis, Pictures sales and operating profit were both up by 3%.
Sony figures the studio will take a one-time writeoff of $900-$950 million this fiscal year if the Financial Accountings Standards Board approves new accounting rules for the industry this month as expected. Among other provisions, the rules would require advertising to be expensed as incurred, not over the life of a film.
Sony Pictures is part of Sony Corp. of America, which now houses the recently created Sony Broadband Entertainment. The unit is designed to enhance the value of Sony’s software assets and, Sony said, it will “pursue content creation and network distribution businesses, including potential strategic alliances.”
Music revs up
In music, revenue was up 3% on a local currency basis as operating income fell 14%. Sales were soft in Europe and Brazil, but booming in the U.S., led by Ricky Martin, Celine Dion, Mariah Carey and Dixie Chicks. Overall weaker numbers reflect investments in digital media projects as well as a one-time gain the year earlier.
On a reported basis, sales were down 6.8% and profit was down 22.4%.
Games: On a local currency basis, sales were down 6% and operating income fell 5% due to heavy start-up investments in PlayStation2, which was introduced in Japan in March. Worldwide shipments of PlayStation hardware slipped to 18.5 million units from 21.6 million the year before.
On a reported basis, games’ revenue fell 16.5% and operating income was down 43%.
Electronics: On a local currency basis, sales rose 13% and operating income soared 132% on higher sales of PCs and digital audio-visual equipment worldwide. On a reported basis, electronics revenue rose 1.1% and operating income fell 9.5%.
For Sony’s fourth quarter, revenue fell 11.7% to $15.6 billion with net losses of $347 million. Quarterly pictures revenue rose 7.8% and operating income soared 113%. Revenue fell 1.1% in music and 0.9% in games, and rose 18.3% in electronics.
Sony shares fell 3.3% Friday to close at $225.63.
(Jon Herskovitz in Tokyo contributed to this report.)
