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When in actual fact the analysts got it wrong (as usual):
http://www.1up.com/do/newsStory?cId=3156799
Sony Profit Loss Far Less Than Predicted
50%? Analysts were way off; it was only a fraction of that.
By Patrick Klepek, 01/30/2007
That'll teach us and the rest of the gaming media to take analysts
predictions and run with them, as Bloomberg yesterday reported a
prediction culled from five analysts that Sony would announce
third-quarter losses 50% lower than the numbers reported in 2005,
primarily due to perceived sluggish sales of PlayStation 3. In the
official notes this morning, Sony did experience a loss in the the
quarter, but only a 5.3% drop from the prior year.
Strong box office profits from the company's movies (thanks for not
screwing up the Bond reboot, Sony) and encouraging sales in the
television and digital camera departments certainly aided in filling the
holes. Combined, they helped Sony report a $1.3 billion (159.9 billion
yen) profit. Simultaneously, their games division reported a
third-quarter loss of $445 million (54.2 billion yen), compared to a
$557 million (67.8 billion yen) profit in 2005.
PS3, obviously, continues to be painted as the primary loss driver, as
Sony admits they would have made more if they'd priced the machine
closer to production costs -- imagine what the sales would be like if
the machine was closer to $1,000. I'd pay to experience that alternate
reality for a few days. Sony also said sales of the PSP have been
"slow," as Nintend0 maintains the upper hand in the handheld market.
Analysts said all sorts of things to different websites this morning
about Sony's results, but we listened to them yesterday and that blew up
in our face, so, let's give 'em a break today, shall we?
AirRaid wrote:
quote:
> http://www.bloomberg.com/apps/news?
> pid=20601101&sid=a4Jrqd8sIuJc&refer=japan
>
> Jan. 29 (Bloomberg) -- Sony Corp., the world's largest maker of video-
> game players, may report third-quarter profit fell 50 percent after
> its flagship PlayStation 3 lost market share to Nintendo Co.'s Wii.
>
> Losses from games probably drove net income down to 84.1 billion yen
> ($691 million) in the three months ended Dec. 31, from a record 168.9
> billion yen a year earlier, according to the median estimate of five
> analysts surveyed by Bloomberg. Sales at Tokyo-based Sony, which
> reports earnings tomorrow, probably rose 9.6 percent to 3 trillion
> yen.
>
> The results may highlight Chief Executive Officer Howard Stringer's
> failure to fend off Nintendo, whose $250 Wii console outsells the
> PlayStation 3 by two-to-one. Sony may still exceed its full-year
> profit target because of a weaker yen, sales of Bravia televisions and
> growth at its movie unit.
>
> ``A drop in third-quarter results is largely expected on the games
> division. There's no surprise unless the company further reduces its
> profit forecasts,'' said Mitsushige Akino, who oversees $468 million
> in assets at Ichiyoshi Investment Management Co. in Tokyo. Akino
> doesn't recommend investors buy Sony stock ``until the company
> improves its earnings.''
>
> Sony in October cut this fiscal year's profit forecast to a five-year
> low of 80 billion yen after delays in the new PlayStation's debut and
> a recall of defective laptop batteries, the largest in consumer
> electronics history.
>
> Shares of Sony have risen 9.6 percent in the past six months, trailing
> the 61 percent gain by Nintendo and Xbox 360-maker Microsoft Corp.'s
> 26 percent increase. Today, Sony's stock fell 1.2 percent to close at
> 5,730 yen in Tokyo.
>
> Wii Wins
>
> The game division, Sony's second-largest by revenue, probably lost
> 50.9 billion yen during the quarter, compared with a profit of 67.8
> billion yen a year earlier, after sales fell 7 percent, according to
> the Bloomberg survey.
>
> After botching the PS3's debut with production delays and cutting the
> price to compete against cheaper Wii and Xbox players, Sony will
> probably lose a record 191.9 billion yen from games this fiscal year,
> compared with profit of 8.7 billion yen the previous year, according
> to the Bloomberg survey.
>
> Nintendo, the world's largest handheld game maker, last week reported
> profit in its latest quarter jumped 40 percent to 77.6 billion yen,
> fueled by demand for Wii consoles and portable DS game players.
>
> In the U.S., Nintendo sold 1.1 million consoles in November and
> December, almost double the PlayStation 3 units shipped during the
> period, according to researcher NPD Group. In Japan, Nintendo sold
> 989,118 Wii units last year, more than double PlayStation 3 sales,
> according to researcher Enterbrain Inc.
>
> TVs Help Stringer
>
> Redmond, Washington-based Microsoft last week cut its Xbox 360
> forecasts and now expects to sell 12 million units by June 30, instead
> of 13 million to 15 million. The company sold 10.4 million units of
> the console since its December 2005 debut, exceeding Microsoft's own
> 10 million target.
>
> Even so, Sony's overall profit this fiscal year may beat its own
> forecast from sales of Bravia LCD TVs, Vaio computers and Cyber-shot
> digital cameras, the analysts said.
>
> The company will probably post net income of 122.1 billion yen this
> fiscal year, 53 percent higher than the company's October forecast,
> the survey showed.
>
> Profit at the consumer electronics division, the world's second-
> largest behind Panasonic-maker Matsushita Electric Industrial Co.,
> probably increased 23 percent to 97 billion yen as revenue rose 9.4
> percent to 1.75 trillion yen, according to the survey.
>
> Sticking to Profit Pledge
>
> Profit from cell-phone unit Sony Ericsson Mobile Communications Ltd.,
> which this month reported profit tripled in the latest quarter, also
> helped ease losses from the game division, according to the analysts.
>
> The business, which posted a loss last fiscal year, will generate
> 152.3 billion yen in profit this fiscal year, almost double overall
> operating income, according to the survey.
>
> TV sales helped Stringer, 64, say at this month's Consumer Electronics
> Show that he's sticking to a pledge when he became chief executive in
> 2005, to increase Sony's profit margin to 5 percent by March 2008. The
> company had a 2.6 percent margin last fiscal year.
>
> Sony and partner Samsung Electronics Co., the world's two biggest LCD
> TV makers, sell most of the sets sized 40 inches and above, according
> to researcher DisplaySearch.
>
> The movie studio business probably posted a profit of 24.9 billion
> yen, from a loss of 400 million a year earlier, according to the
> Bloomberg survey.
>
> James Bond, Spider-Man
>
> Profit at the division will probably jump 73 percent this fiscal year,
> according to the survey, after Sony had a record 13 films open at No.
> 1 and led all other studios in U.S. ticket sales with films such as
> ``The Da Vinci Code'' and ``Casino Royale'' during 2006.
>
> Movies such as ``Spider-Man 3,'' due for release in May, will probably
> help drive up profit, CLSA Asia-Pacific Markets analysts Atul Goyal
> and Sandeep Muthangi said in a Jan. 24 report.
>
> Profit from financial services, including life and auto insurance,
> probably fell 63 percent to 17.5 billion yen and sales declined 11
> percent to 169.5 billion yen, the survey showed.
>
> The division's profit fell because of lower stock gains after the
> Nikkei 225 Stock Average's climb slowed to 6.8 percent during the
> quarter, Credit Suisse Group analyst William Drewry wrote in a Jan. 22
> report. A year earlier, the index surged 19 percent, its fastest
> quarterly growth in a decade.
>
> The company plans an initial public offering of Sony Financial
> Holdings Inc. as early as the year beginning April 1, according to
> spokeswoman Kayoko Miyako, who declined to comment on the size of the
> offering.
>
> Sony may raise 300 billion yen to 400 billion yen in an IPO of the
> unit in July or August and may disclose the timing of the offer
> tomorrow, Macquarie Research Equities analyst David Gibson wrote in a
> note to clients on Jan. 17. The funds may be used for a stock buyback,
> benefiting investors, he said.
>
> The following is a summary of earnings that analysts are predicting
> for Sony's third quarter and fiscal year ending March 31. Figures are
> in billions of yen.
>
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