PSP Helps Lift Sony's Third Quarter Profits

After an extended period of disappointing financial results, officials from electronics giant Sony have revealed that profits have risen by 51 percent in the company’s third quarter to ¥226 billion ($1.95bn). Sales during the important sales quarter were up by 10 percent on the same period in 2004 to ¥2,368 billion ($20.46bn), with profit up 17.5 percent to ¥169 billion ($1.46bn) or ¥161.60 ($1.40) per diluted share. Officials are now suggesting the company will remain in profit for the full fiscal year to the tune of ¥70 billion ($608m), a reversal of earlier projections of a loss of ¥10 billion ($86.9m), and perhaps the most tangible proof yet of a turnaround for the company since a massive restructuring program led by new boss Sir Howard Stringer. Stringer’s plans call for 10,000 jobs, 7 percent of Sony’s global workforce, to be trimmed by March 31st 2008. The cost-cutting measures are described as going “smoothly” with 4,500 jobs already having been shed. Sony’s video game division was seen as one of the notable contributors to the improved performance, with sales rising by 48 percent, and operating profit increasing by 52 percent from the same period in 2004, thanks to demand for the PSP console. In fact, the company claims to have shipped 6.22 million PSP consoles worldwide during the quarter, with cumulative shipments now totaling 15 million – although as usual, these figures are well below the number actually sold. Other particular highlights over the Christmas sales period were the company’s range of new Bravia LCD televisions, produced in conjunction with rival Samsung, which gained a number one market share in the U.S. This will be seen as an important victory since many analysts have attributed the company’s slowness in moving from older CRT television technology as one of the main reasons for its recent problems. As a result of the better than expected results, Sony shares closed up 3 percent Thursday at ¥5,080 ($44).