Sony sitting pretty
Quarter boosted by H'wood fare
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On Wednesday, Sony Corp. reported that its net income surged 96% in the fiscal third quarter ended Dec. 31 to just over $1 billion. Sales were up a pinch to $19 billion.
Sony Pictures Entertainment's operating profit soared to $264 million from near breakeven the year before. SPE sales jumped 62% to $2.1 billion, fueled by homevideo/DVD releases of "Spider-Man," "Men in Black II," "Stuart Little 2" and "Mr. Deeds." Quarter was the most profitable in SPE's history.
More recently, Sony/Revolution won the latest weekend box office with "Darkness Falls." The studio's looking for big bucks from "Charlie's Angels: Full Throttle" and "S.W.A.T." this year plus the next Spidey installment in 2004.
SPE chairman John Calley credits Sony's success to long-term planning, some good films and a roaring home entertainment market. More than 40 million DVD and VHS units of "Spider-Man" were shipped last quarter alone.
Pursuing franchise-like films
"Over the last five or six years, me and Amy (Pascal) and Jeff (Blake) and Ben Feingold and others have been trying to put together franchise-like pictures that people could revisit, that were attractive to audiences," he told Daily Variety. "That came to fruition last year when we were able to repeat 'Men in Black' and finish and go to market with 'Spider-Man' after spending years lining up the rights."
Calley, whose contract expires at year's end, said the alliance with Joe Roth's Revolution Studios has "contributed enormously" to Sony's strength.
SPE also cited higher TV revenue from selling "The Nanny" to cable, higher ad revenue from "Wheel of Fortune" and the absence of a hefty restructuring charge that hit the year before when Sony all but shuttered its domestic TV production. Calley said it's a decision he doesn't regret.
"We were running a research-and-development operation for the networks. It wasn't correct," he said, and it was way too expensive, he added.
Many think Sony could use its own network. Company held talks with CBS before the Eye web merged with Viacom and is perpetually linked in speculation with NBC, the one main net that's not owned by a media company.
Tongues started wagging again several weeks ago when NBC topper Andrew Lack was named head of Sony Music. Lack is a close friend of Sony Corp. of America chairman Howard Stringer.
Some disappointments
SPE did note one sore spot last quarter: a weak theatrical perf from "I Spy."
Sony Music sounded a low note, with revenue dipping 3.3% to $1.7 billion. Excluding so-called inter-segment transactions with Games and Pictures, sales fell more than 8%. Operating income fell 9.5% to $174 million
Electronics, Sony's biggest business by far, saw sales ease 4.6% to $12.2 billion, but operating income jumped 14% to $685 million.
And at Games, father of PlayStation, sales were about flat at $3.2 billion with operating income up 7.9% to $174 million.
Despite upbeat numbers, Sony expressed caution on the economic front and left unchanged its forecast for the fiscal year to end in March.
On Tuesday, Sony announced the resignation of chairman Norio Ohga for heath reasons. As expected, CEO Nobuyuki Idei will assume the top job, taking the reins officially as of today. Sony is also restructuring its board.
Separately, Sony and Ericsson said they would inject about $300 million this quarter into their money-losing joint venture, Sony Ericsson Mobile Communications.
