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Sony sees big slump in income

Gains on the PlayStation side can't offset woes facing other parts of the Japanese company's consumer electronics operations. Its full-year net income forecast takes a 17 percent dive.

The spring quarter was not a good one for Sony.

The consumer electronics giant on Tuesday reported that for the three months ended June 30, its net income was 35 billion yen ($330 million), or just more than half of the 66.5 billion recorded in the same period a year earlier.

80GB PS3 at E3
The mood was much more upbeat for Sony at the E3 show two weeks ago, where, among other things, Sony Computer Entertainment of America CEO Jack Tretton announced an 80GB PS3 for $400. Daniel Terdiman/CNET News

Revenue for this year's second calendar quarter (the first quarter of Sony's April-to-March fiscal year) was 1.979 trillion yen, a slight gain from last year's 1.977 trillion yen.

There was at least one bright spot amid the gloom. Sony said its game unit recorded positive operating income, compared with a loss in the year-ago period. That shift was largely the result of higher sales of PlayStation 3 software, lower costs for PS3 hardware, and strong sales of PlayStation Portable hardware.

But in Sony's overall electronics segment, operating income took a tumble, pushed down by increased price competition and a year-on-year decrease in equity in net income--a whopping drop to 600 million yen ($5 million) from 17.7 billion yen--for Sony Ericsson, its mobile-phone joint venture.

Even as profitability and unit sales improved for Sony's Bravia LCD televisions, Electronics segment profits took a hit from sales of mainstay consumer products, including Cyber-shot cameras, Handycam video cameras, and Vaio PCs.

The company also took a hit in its Sony BMG operations, due in part to a sagging physical-music market and high restructuring costs.

And matters don't seem any brighter as Sony heads forward. The company on Tuesday reduced its net income forecast for the full fiscal year. It now expects to report full-year net income of 240 billion yen, down 17 percent from its May forecast and down 35 percent from the actual results for the year that ended March 31.