TOKYO--(Business Wire)--
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Sony Corporation
1-7-1 Konan, Minato-ku
Tokyo 108-0075 Japan
No: 08-139E
3:00 P.M. JST, October 29, 2008
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Consolidated Financial Results for the Second Quarter Ended September 30, 2008
Tokyo, October 29, 2008 -- Sony Corporation today announced its consolidated
results for the second quarter ended September 30, 2008 (July 1, 2008 to
September 30, 2008).
-- Consolidated sales decreased 0.5% year-on-year; local currency sales
increased 5%.
-- Operating income decreased due to the impact from the decline in the
Japanese stock market on the Financial Services segment and a Y 60.7
billion gain on sale of a portion of the former headquarters site
recorded in the same quarter of the previous fiscal year.
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(Billions of yen, millions of U.S. dollars, except per share amounts)
Second quarter ended September 30
Change in
2007 2008 yen 2008*
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Sales and operating revenue Y 2,083.0 Y 2,072.3 -0.5% $19,926
Operating income ** 111.6 11.0 -90.1 106
(Equity in net income of
affiliated companies recorded
within operating income) 21.1 1.1 -94.6 11
Income before income taxes ** 109.1 7.3 -93.3 70
Net income 73.7 20.8 -71.8 200
Net income per share of
common stock
-- Basic Y 73.50 Y 20.74 -71.8 $0.20
-- Diluted 70.09 19.83 -71.7 0.19
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Unless otherwise specified, all amounts are presented on the basis of Generally
Accepted Accounting Principles in the U.S. ("U.S. GAAP").
* U.S. dollar amounts have been translated from yen, for convenience only, at
the rate of Y 104=U.S. $1, the approximate Tokyo foreign exchange market rate as
of September 30, 2008.
** Effective from the first quarter of the fiscal year ending March 31, 2009,
Sony revised the presentation of its financial information to ensure that it is
consistent with the way management views its consolidated operations. Since Sony
considers Sony Ericsson Mobile Communications AB ("Sony Ericsson"), S-LCD
Corporation ("S-LCD") and SONY BMG MUSIC ENTERTAINMENT ("SONY BMG") (which
together constitute a majority of Sony's equity investments) to be integral to
Sony's operations, Sony determined that the most appropriate method to report
equity in net income or loss of all affiliated companies was as a component of
operating income. Of the above equity affiliates, the equity earnings from Sony
Ericsson and S-LCD are recorded within the operating income of the Electronics
segment and the equity earnings from SONY BMG are recorded within All Other. In
connection with this reclassification, consolidated operating income, operating
income of each segment and consolidated income before income taxes for all prior
periods have been reclassified to conform with the current quarter presentation.
Due to the above noted change in presentation of operating income to include
equity in net income of affiliated companies, "sales and operating revenue less
costs and expenses" is equivalent to the definition of operating income under
the previous presentation. For purposes of assisting investors comparing Sony's
current information with information under the prior presentation, the table
below reconciles sales and operating revenue less costs and expenses to
operating income as presented above:
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(Billions of yen)
Second quarter ended September 30
2007 2008
----------------------------------------------------------------------
Sales and operating revenue less costs and expenses Y 90.5 Y 9.9
Equity in net income of affiliated companies 21.1 1.1
-------- --------
Operating income Y 111.6 Y 11.0
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Sales and operating revenue less costs and expenses is not a presentation in
accordance with U.S. GAAP. It is presented as supplemental information for
transition purposes and should be considered in addition to, not as a substitute
for, Sony's operating income and net income.
Consolidated Results for the Second Quarter Ended September 30, 2008
Sales and operating revenue ("sales") decreased 0.5% compared to the same
quarter of the previous fiscal year ("year-on-year").
Electronics segment sales decreased 0.6% year-on-year due to the negative impact
from the appreciation of the yen against the U.S. dollar despite higher sales of
certain products, primarily BRAVIA LCD televisions and VAIO(TM) PCs. In the Game
segment, sales increased 10.3% year-on-year primarily as a result of an increase
in sales of PLAYSTATION(R)3 ("PS3") and PSP(R) (PlayStation Portable) ("PSP").
In the Pictures segment, there was a 3.4% increase in sales year-on-year due to
higher motion picture revenues, primarily from the strong worldwide theatrical
performance of Hancock. In the Financial Services segment, although revenue from
insurance premiums at Sony Life Insurance Co., Ltd. ("Sony Life") increased,
segment revenue decreased by 36.1% year-on-year due to the impact of a
significant decline in the Japanese stock market.
On a local currency basis, consolidated sales increased 5% year-on-year. For
references to sales on a local currency basis, see Note.
Operating income decreased 90.1% year-on-year. One of the factors causing the
year-on-year decrease in operating income was a more than Y 40 billion ($385
million) impact from the decline in the Japanese stock market on the Financial
Services segment. Additionally, operating income for the same quarter of the
previous fiscal year included a Y 60.7 billion gain on the sale of a portion of
Sony's former headquarters site.
In the Electronics segment, operating income decreased significantly, mainly due
to the deterioration of the cost of sales ratio, reflecting a decline in unit
selling prices and a decrease in equity in net income for Sony Ericsson. In the
Game segment, operating loss decreased significantly year-on-year primarily due
to PS3 hardware cost reductions and increased sales of PS3 software, as well as
strong sales of PSP hardware. In the Pictures segment, operating income
increased mainly due to the increase in motion picture revenues described above.
In the Financial Services segment, operating income decreased significantly
year-on-year due to a deterioration in profitability at Sony Life resulting from
the significant decline in the Japanese stock market.
Restructuring charges of Y 0.9 billion ($9 million) were recorded as operating
expenses this quarter compared to Y 18.5 billion in the same quarter of the
previous fiscal year.
Equity in net income of affiliated companies recorded within operating income
decreased 94.6% year-on-year to Y 1.1 billion ($11 million). Sony recorded
equity in net loss for Sony Ericsson of Y 1.6 billion ($15 million), compared to
equity in net income of Y 21.1 billion in the same quarter of the previous
fiscal year primarily due to a shift of the product mix to lower priced phones.
Sony also recorded equity in net loss of Y 3.1 billion ($30 million) for SONY
BMG, a deterioration of Y 2.6 billion year-on-year, reflecting the impact of the
timing of new releases, the continued decline of the worldwide physical music
market and higher restructuring costs. Equity in net income of Y 2.6 billion
($25 million) was recorded for S-LCD, a joint-venture with Samsung Electronics
Co., Ltd., compared to equity in net loss of Y 0.5 billion in the same quarter
of the previous fiscal year.
Income before income taxes was Y 7.3 billion ($70 million), a year-on-year
decrease of 93.3%, due to the decrease in operating income discussed above.
Income taxes: During the quarter, Sony recorded an income tax benefit amounting
to Y 8.9 billion ($86 million). The benefit resulted from the utilization of tax
credits and a reversal of tax reserves principally due to the favorable outcome
of tax audits and litigation at certain Sony subsidiaries outside of Japan.
Minority interest in loss of consolidated subsidiaries was Y 4.6 billion ($44
million), compared with Y 0.5 billion income in the same quarter of the previous
fiscal year. Minority interest in loss was recorded during the quarter due to
the recording of a loss at Sony Life. Sony Life is a consolidated subsidiary of
Sony Financial Holdings Inc. ("SFH"), in which Sony's ownership decreased from
100% to 60% as a result of the global initial public offering of SFH shares in
October 2007.
As a result of the changes in the items discussed above, net income decreased
71.8% year-on-year to Y 20.8 billion ($200 million).
To view the full announcement, paste the following link into your web browser:
http://www.sony.net/SonyInfo/IR/financial/fr/08q2_sony.pdf
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Investor Relations Contacts:
Tokyo New York London
Gen Tsuchikawa Sam Levenson Shinji Tomita
+81-(0)3-6748-2180 +1-212-833-6722 +44-(0)20-7426-8696
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Home Page: http://www.sony.net/IR/
Sony Corporation
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