14 DAY TRIAL // Even if it's one of the world's largest corporations and among the most important manufacturers of consumer electronics, Sony's taken quite a beating at the hands of the economic crisis that's ravaging our world as we speak. And that's because the company's second quarter results, which have just been announced, indicate the fact that Sony's income has decreased with as much as 71.8 percent, compared to the similar period of 2007.
As the company's statement reads, after taking into account all the taxes, the operating income decreased 78.1% year-on-year. One of the factors (actually, the most important one) causing the year-on-year decrease in operating income was a more than 40 billion Yen ($385 million) impact from the decline in the Japanese stock market on the Financial Services segment.
Another reason is the fact that the various ventures the company is involved in haven't fared so good, either. Thus, Sony recorded equity in net loss of 1.6 billion Yen ($15 million) for Sony Ericsson, compared to equity in net income of 21.1 billion Yen in the same quarter of the previous fiscal year, primarily due to a shift of the product mix to lower priced phones.
Furthermore, Sony also recorded equity in net loss of 3.1 billion Yen ($30 million) for SONY BMG, a deterioration of 2.6 billion Yen 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. However, every cloud has a silver lining, and in Sony's case, that silver lining is represented by S-LCD, a joint-venture with Samsung Electronics, which has recorded an equity in net income of 2.6 billion Yen ($25 million), compared to equity in net loss of 0.5 billion Yen in the same quarter of the previous fiscal year.
However, Sony points out that its sales of electronic products have recorded just a slight decrease, at least for now, of just around 0.6%, most of the losses in this area being caused by the appreciation of the yen against the U.S. dollar despite higher sales of certain products, primarily BRAVIA LCD televisions and VAIO PCs.
In the Gaming segment, sales increased 10.3% year-on-year primarily as a result of a rise in the number of PLAYSTATION 3 and PSP consoles sold, while in the Pictures segment, there was a 3.4% increase in sales year-on-year due to higher motion picture revenues.
All in all, Sony's financial results reflect what's going on in the entire world, and it remains to be seen just how the Japanese company will end this year, and whether the approaching Christmas shopping spree will actually boost its sales.