SI: Sony Posts Q2 FY09 Results – Sales Down, Forecasts Improve

*Christopher* · October 30, 2009

Sony’s reveal of their Q2 FY09 results indicate one thing to me beyond anything else: an overall lack of sales of -19.8% compared to this time last year in every segment except for music and finance. However, despite that statement Sony is looking upward and has revised their forecast, as Q2 results exceeded expectations. Operating income definitely shed a lot of loss and is positive if you exclude equity in net income of affiliates and restructuring charges. Sony also notes, as it has for many moons now, “Structural transformation initiatives are proceeding as planned.” Sounds like something a droid would say to me in the future.

Here is a link to the transcript of the earnings announcement – Sony Corp Q2 2009 Earnings Conference Call.

Sony’s stock in the New York Stock Exchange is also flirting with its highest levels since September 2008 at 29.39.

Let’s examine each segment:

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Consumer Products & Devices suffered a decrease in sales of 36.5% with BRAVIA LCD TV’s, Cyber-shot cameras, and system LSI’s for game businesses. Lagging performance in Handycam video cameras and batteries took a hit on the operating income, which decreased by 82.7 %.

Networked Products & Services also saw an overall decrease in sales by 24.2%. VAIO PC sales fell behind and PS2 sales continued to decline. However, with the recent success of the PS3 price drop, I have a feeling next quarter will be pretty incredible in this regard. VAIO took a real hit because Sony has to sell for less to keep up with overall price declines, which meant a decrease in unit sales. Foreign exchange rates also hurt Sony, all amounting to a operating loss of 58.8 billion yen.

B2B & Disc Manufacturing faltered with a 19% loss in sales compared to last year, mainly because developing countries embracing professional/broadcast equipment lessened due to the woes with the global economy. Disc Manufacturing also took a hit.

Sony Pictures saw a 30.4% decrease in profits overall, but only a 20% decrease in the USA. Hancock was a huge hit for Sony last year and didn’t really have the same draw. Sony did have some key players with District 9, The Ugly Truth and Julie & Julia. We feel that their latest venture in the quick release of Michael Jackson’s final concert rehearsals This Is It will dramatically change things next quarter, though.

The consolidation of Sony Music has resulted in an overall increase of sales by 146%. However, but that is of course assuming that Sony Music would have been consolidated the previous year. Strong sales contributed to Whitney Houston’s I Look To You, the Kings of Leon’s Only By The Night, and Daughtry’s Leave This Town. In Japan, best selling titles included Miliyah Kato’s Ring. Michael Jackson sales were very positive on the operating income and there was a large decrease in overhead and restructuring costs.

Sony Life is looking stronger than ever. With a 135.% increase in revenue (171.3 billion yen), its investments have led to an improvement in net gains, valuation gains from bond investments (in the general account) helped by the stable Japanese stock market. Insurance premium revenue has also steadily increased.

Here are the overall unit sales (in millions) of key Sony Consumer Electronics & Game Products: