Strong sales of digital consumer electronic gadgets helped Sony achieve record sales and higher net profit in the financial year just-ended, but shipments of PlayStation 3 consoles missed their target, the company announced this week.
Sony reported a net profit of ¥126.3 billion for the year from April 2006 to March 2007. That's a 2.2 per cent increase on profits from the year before. Sales hit an all-time high of ¥8.3 trillion, up 10.5 per cent over the previous year. Compared to Sony's most recent estimates, which were revised in January , those figures are 14.8 per cent and 0.8 per cent higher respectively.
Sony's core electronics segment saw a healthy 16.9 per cent increase in sales and profitability on the back of an ongoing restructuring plan. The Japanese manufacturer, which has ended several unprofitable product lines, said it plans to stop making CRT TVs and Vaio desktop computers.
"The electronics segment showed a remarkable recovery," said Nobuyuki Oneda, Sony's chief financial officer.
Sales of Bravia LCD televisions more than doubled to 6.3 million sets in the year, and Sony said it expects to sell 10 million sets this year. After arriving late in the LCD TV market, the company has gone on to become one of the strongest players in the sector and anticipates its LCD TV business will finally turn an annual profit in the current year.
Other strong-selling products included digital cameras and Vaio laptop computers, said Oneda. Sony sold 17 million digital cameras in the year and expects to sell 20 million this year as consumers continue to snap up the CyberShot.
Not all product sectors had a good year, however.
Sony's portable audio business, which was badly hit by the success of Apple's iPod, reported sales of 4.5 million units. Sony had been hoping to sell 5.5 million Walkman players in the year. The company has set a goal of 5 million for the current year.
"We would like to make a comeback and return," said Oneda. He added that Sony aims to achieve this with new players that offer both audio and video playback.
The largest losses in the electronics sector came from the batteries business, which recorded a ¥51.2 billion charge due to the global recall of faulty batteries. That recall is progressing according to plan and Sony doesn't anticipate costs to be above estimates, the company said.
Sony's games business recorded a six per cent increase in sales and losses of ¥232.3 billion. The losses were largely the result of start-up costs for the PlayStation 3 and the effects of a price cut that Sony made on the console prior to its launch in Japan. A total of 5.5 million PlayStation 3 consoles were shipped between the November launch and the end of March. That's below Sony's target of six million. The company cited production delays that have now been fixed.
The shipment numbers count consoles as they leave Sony's factories and include those in warehouses and en route to retailers. The number of consoles sold to retailers stood at around 3.6 million.
For the current fiscal year, Sony anticipates record sales of ¥8.78 trillion and significantly higher net profit of ¥320 billion.