Yen's rise sinks Sony 2nd qtr.
An 18% gain in the yen from last year's comparable period dragged Sony Pictures Entertainment sales and operating revenue 3.7% lower to $ 795.87 million despite box office successes such as "In the Line of Fire", "Sleepless in Seattle" and "Cliffhanger." But excluding yen gains, business grew 22%.
Sony's Columbia Pictures and TriStar Pictures units received a more than 20% share of U.S. box office revenues for the year to date, the company said. It also cited a "very strong performance" by its Loews Theaters business. In all, revenues for the Pictures Group were $ 796 million for the quarter.
Many Japanese companies have seen their profits erode in the past year as a result of a perceived White House "strong yen" policy. Currency traders sold the dollar down almost as far as 100 yen this summer on perceptions that the U.S. wanted a firm yen to shrink Japan's whopping trade surplus, measured in September at 13.3 trillion yen.
And things could get even worse. Sony forecasts an increasingly harsh marketplace due to the yen and a sluggish global economy.
"Under such circumstances, we will continue to introduce innovative new products to stimulate consumer demand in the electronics business and will promote our activities in the entertainment business," Sony said.
Sony converted yen results to dollars at the rate of 105 yen per dollar, the Tokyo market rate as of Sept. 30, 1993. A year earlier, the dollar was quoted at 119.90 yen, according to Reuters. It traded late Thursday in New York at 107.25 yen.
"Sony's operating environ-ment grew more severe due to the rapid appreciation of the yen against the U.S. dollar and European currencies, and due to the protracted downturn in the Japanese audiovisual equipment market," the company said.
Results from the Sony Music Group hit a sweeter note as sales and operating revenues rose 5.6% to $ 1.1 billion in spite of the higher yen, thanks to hits from Mariah Carey, Billy Joel and Barbra Streisand among others, the company said.
Overall, Sony Corp. earnings fell 23.7% to $ 21.67 million or 20% to 6 cents a share as revenues dropped 8.7% to $ 8.94 billion.
