'Code' helps conglom profits
Even with the strong perf of “The Da Vinci Code,” it was electronics that helped Sony solve its earnings woes.Sony announced an 11% boost in revenue to ¥1.744 billion ($15.2 billion) for its first quarter, and net profit of $278 million, a turnaround from a loss of $62 million a year earlier. Sony tentpole was one of the key factors in a solid 42% revenue jump at the studio to $1.78 billion. But Sony Pictures still posted a net loss of $10 million in the quarter — largely because of marketing costs for upcoming films, chief financial officer Rob Wiesenthal told analysts. “Casino Royale,” the next James Bond pic, is due out from the studio in the fall. Company also was hit by slowing DVD sales after the stellar homevid perf of “Hitch” last year. Electronics division had the sharpest picture. Unit enjoyed a 14% revenue boost and profit of $412 billion after a loss of more than $200 million a year earlier. Profitability was also aided by the reduction of several thousand jobs and other overhead costs. Electronics turnaround is a feather in the cap of conglom topper Howard Stringer, who has made rejuvenating that business a priority of his tenure. Electronics are responsible for nearly three-quarters of Sony revs, and Stringer has instituted a three-year plan to return the division to strong profitability. Sales of high-margin Bravia LCD sets, Cyber-shot digital cameras and Vaio notebook PCs were among the stronger performers in the unit. Year-on-year profit jump was the first in the first quarter in four years. Overall, Sony is forecasting a 10% gain in sales and a 5% jump in profit for the entire fiscal year. Investors were happy with the results, sending Sony stock up 6% to $45.51. But elsewhere at Sony, news was not as bright. In addition to the decline in studio profit, music and games divisions suffered losses. Embattled Sony BMG, which has recently been under scrutiny from the European courts, recorded a $147 million drop in first-quarter revenue to $872 million, and a loss of $81 million. And game division revenue slipped 29% to $1.07 billion. Company is banking heavily on PS3 sales in the fall to lift the unit.