Sony Profit Plummets 94 Percent

TOKYO, October 26: Second-quarter profit at the Sony
Corporation plummeted 94.1 percent to 1.7 billion yen ($14 million), due in
large part to the recall of the company’s laptop batteries.

The company posted revenues of 1.85 trillion yen ($15.7
billion), an 8.3 percent rise on the year-ago period, and an operating loss of
20.8 billion yen ($177 million), versus an operating profit of 74.6 billion yen
last year. The loss includes a 51.2 billion yen provision for charges expected
to be incurred as a result of the recall of notebook computer battery packs
that use lithium-ion battery cells manufactured by Sony. A number of companies,
including Dell, Apple and Sony itself, have been forced to recall about 9.6
million batteries because they are said to be a possible fire hazard.

At Sony Pictures, revenues increased by 12.1 percent to
178.2 billion yen ($1.5 billion), a 12.1 percent increase. Sales increased
primarily due to a greater number of theatrical releases, combined with higher
theatrical revenue per film. This was partially offset by lower DVD revenues on
theatrical films. But the division still posted a wider loss, of 15.3 billion
yen ($129 million), compared to last year’s loss of 6.6 billion yen. Motion
picture operating income was adversely affected by higher total marketing
expenses and the theatrical underperformance of Zoom and All The King's Men. Lower DVD revenues also contributed to the
increased operating loss. Television operating income declined in the current quarter
due to production and marketing expenses associated with new network and
made-for-syndication television shows.

In the electronics division, revenues were up 12.1 percent
to $11.7 billion, but operating income fell 71.4 percent to $68 million. Revenues
at Sony Ericsson rose 42 percent to 2.9 billion euros, and net income more than
doubled to 298 million euros. The gaming division saw revenues drop 20.5
percent to $1.4 billion, delivering an operating loss of $369 million.