A dour economy pummeled Japanese giant Sony in the June quarter even as its U.S.-based entertainment biz raked in the profits.
It’s been four years since chairman Howard Stringer took the helm and began a painful restructuring of Sony’s entrenched bureaucracy and sprawling businesses, his efforts complicated over the past year by a global recession.
The former CBS chief and documentary filmmaker has overseen mass layoffs and plant closings, shuttered entire product lines and shaken up management. Earlier this year, he pushed aside Sony president Ryoji Chubachi and assumed that title. He also recently promoted a group of four relatively young (by Japanese standards) executives and put them in charge of reconfigured business units.
Sony said Thursday that total revenue fell 19% to 1.6 billion yen ($16.7 billion) for the fiscal first quarter ended in June.
It posted a net loss of 37.1 billion yen ($386 million) compared with a 35 billion yen profit in the year-earlier period. The massive electronics and game divisions both lost money.
But the red ink was less than expected, and Sony shares popped nearly 10% in trading on the New York Stock Exchange, closing at $27.28. Restructuring costs and currency fluctuations were behind much of the decline in sales and earnings.
A bright spot in the quarter, Sony Pictures Entertainment saw revenue rise 15% to $1.8 billion and swung to a $19 million profit.
The company cited strong motion pictures results from “Angels and Demons” and “Terminator Salvation.” It also touted higher U.S. network revenues, made-for-cable programming and television sales of motion pictures.
Music revenue shot higher as well, mostly because the business got a lot bigger after Sony Music Entertainment became a wholly owned subsidiary in October.
Music posted a profit of $56 million on revenue of $1.1 billion.
The “physical music business,” as Sony called it, continued to soften. On a pro forma basis, SME sales fell 19%.
Bestselling albums during the quarter were Bob Dylan’s “Together Through Life,” Dave Matthews Band’s “Big Whiskey and the GrooGrux King,” and Kings of Leon’s “Only by the Night.”
The music arm also includes Sony Music Entertainment Japan and the 50%-owned joint venture Sony/ATV Music Publishing — a name that’s been much in the news since the late pop icon Michael Jackson owned a big chunk of it.
Electronics, now part of an expanded division called Consumer Products & Devices, posted a loss of $20 million. Revenue fell 27% on softer sales of key products like Bravia LCD televisions, Cyber-shot compact digital cameras and Handycam video cameras.
The global economic slowdown had dampened consumer spending and resulted in steep price cuts as companies compete for limited business. Sony has been ceding ground to Samsung in TVs, Nintendo in game players and Apple in portable media players.
The games business, now called Networked Products & Services, saw revenue decline 37%. It lost $414 million on slower sales of PlayStation3 hardware, software and Vaio PCs.
Sales of the PS3 fell to 1.1 million from 1.6 million the year before. PlayStation Portable sales declined to 1.3 million from 3.7 million.
A division now called B2B & Disc Manufacturing posted revenue of $1 billion and losses of $129 million.
Financial Services grew revenue to $2.4 billion, with profits of $502 million.