TIDMSON
Sony Corporation1-7-1 Konan, Minato-kuTokyo 108-0075 Japan
No.10-096E3:00 P.M. JST, July 29, 2010
Consolidated Financial Results for the First Quarter Ended June 30, 2010
Tokyo, July 29, 2010 -- Sony Corporation today announced its consolidated results for the first quarter ended June 30, 2010 (April 1, 2010 to June 30, 2010).
-- Operating income of 67.0 billion yen was recorded, a significant
improvement over the loss recorded in the same quarter of the previous
fiscal year.
-- The Consumer, Professional & Devices and Networked Products &
Services segments contributed significantly to the improved operating
results.
-- Net income attributable to Sony Corporation's stockholders of 25.7
billion yen was recorded for the current quarter, compared to a net
loss in the same quarter of the previous fiscal year.
-- Forecasted operating income for the fiscal year has been revised
upward, even though further appreciation of the yen against the euro
is expected for the remainder of the fiscal year.
(Billions of yen,
millions of U.S.
dollars, except per
share amounts)
First quarter ended
June 30
2009 2010 Change in yen 2010*
Sales and operating ¥1,599.9 ¥1,661.0 +3.8 % $18,663
revenue
Operating income (25.7) 67.0 - 753
(loss)
Income (loss) before (32.9) 78.9 - 887
income taxes
Net income (loss) (37.1) 25.7 - 289
attributable
to Sony
Corporation's
stockholders
Net income (loss)
attributable to
Sony Corporation's
stockholders
per share of common
stock:
- Basic ¥(36.96) ¥25.65 - $0.29
- Diluted (36.96) 25.61 - 0.29
Unless otherwise specified, all amounts are presented on the basis of Generally Accepted Accounting Principles in the U.S. ("U.S. GAAP").
Supplemental Information
In addition to operating income (loss), Sony's management also evaluates Sony's performance using non-U.S. GAAP adjusted operating income. Operating income, as adjusted, which excludes equity in net income (loss) of affiliated companies and restructuring charges, is not a presentation in accordance with U.S. GAAP, and is presented to enhance investors' understanding of Sony's operating income (loss) by providing an alternative measure that may be useful to understand Sony's historical and prospective operating performance.
(Billions of yen, millions
of U.S. dollars)
First quarter ended June 30
2009 2010 Change in yen 2010
Operating income (loss) ¥(25.7) ¥67.0 - % $753
Less: Equity in net (15.1) 6.7 - 75
income (loss)
of affiliated companies
Add: Restructuring 33.9 7.2 -78.9 80
charges recorded
within operating expenses
Operating income, as adjusted ¥23.3 ¥67.5 +189.8 % $758
Sony's management uses this measure to review operating trends, perform analytical comparisons and assess whether its structural transformation initiatives are achieving their objectives. This supplemental non-U.S. GAAP measure should be considered in addition to, not as a substitute for, Sony's operating income (loss) in accordance with U.S. GAAP.
*U.S. dollar amounts have been translated from yen, for convenience only, at the rate of 89 yen=1 U.S. dollar, the approximate Tokyo foreign exchange market rate as of June 30, 2010.
Sony realigned its reportable segments from the first quarter of the fiscal year ending March 31, 2011, to reflect modifications to the organizational structure as of April 1, 2010, primarily repositioning the operations of the previously reported B2B & Disc Manufacturing segment. In connection with this realignment, the Consumer Products & Devices segment was renamed the Consumer, Professional & Devices ("CPD") segment. The CPD segment includes televisions, digital imaging, audio and video, semiconductors and components as well as professional solutions (the B2B business which was previously included in the B2B & Disc Manufacturing segment). The equity results of S-LCD Corporation ("S-LCD"), a joint venture with Samsung Electronics Co., Ltd., are also included within the CPD segment. The disc manufacturing business previously included in the B2B & Disc Manufacturing segment is now included in All Other.
The Networked Products & Services ("NPS"), Pictures, Music and Financial Services segments remain unchanged. The equity earnings from Sony Ericsson Mobile Communications AB ("Sony Ericsson") continue to be presented as a separate segment.
In connection with this realignment, both the sales and operating income (loss) of each segment in the first quarter ended June 30 of the previous fiscal year have been revised to conform to the current quarter's presentation.
Consolidated Results for the First Quarter Ended June 30, 2010
Sales and operating revenue ("sales") was 1,661.0 billion yen (18,663 million U.S. dollars), an increase of 3.8% compared to the same quarter of the previous fiscal year ("year-on-year") primarily due to an increase in sales in the NPS and CPD segments, partially offset by factors including unfavorable exchange rates, and a decrease in revenue in the Financial Services segment resulting from a decline in the Japanese stock market.
During the quarter ended June 30, 2010, the average rate of the yen was 91.0 yen against the U.S. dollar and 115.5 yen against the euro, which was 5.8% and 13.5% higher, respectively, than the previous year's first quarter. On a local currency basis, sales increased 8% year-on-year. For references to sales on a local currency basis, see Note on page 8.
Operating income was 67.0 billion yen (753 million U.S. dollars) as compared to an operating loss of 25.7 billion yen in the same quarter of the previous fiscal year. This was mainly due to improved operating results in the CPD and NPS segments as a result of an improvement in the cost of sales ratio and an increase in gross profit from higher sales. Excluding equity in net income (loss) of affiliated companies and restructuring charges, operating income on an as adjusted basis increased by 44.2 billion yen to 67.5 billion yen (758 million U.S. dollars) year-on-year.
Equity in net income of affiliated companies, recorded within operating income, was 6.7 billion yen (75 million U.S. dollars) as compared to a loss of 15.1 billion yen in the same quarter of the previous fiscal year. Sony recorded equity in net income for Sony Ericsson of 0.6 billion yen (7 million U.S. dollars) compared to equity in net loss of 14.5 billion yen in the same quarter of the previous fiscal year. Equity in net income for S-LCD was 4.5 billion yen (50 million U.S. dollars) as compared to a loss of 1.8 billion yen in the same quarter of the previous fiscal year.
The net effect of other income and expenses was income of 11.9 billion yen (134 million U.S. dollars), an improvement of 19.1 billion yen year-on-year, primarily due to the recording of a net foreign exchange gain in the current quarter versus a net foreign exchange loss in the same quarter of the previous fiscal year.
Income before income taxes of 78.9 billion yen (887 million U.S. dollars) was recorded as compared to a loss of 32.9 billion yen in the same quarter of the previous fiscal year.
Income taxes: During the first quarter of the current fiscal year, Sony recorded 43.7 billion yen (491 million U.S. dollars) of income taxes, resulting in an effective tax rate of 55.3%. The effective tax rate was higher than the Japanese statutory tax rate mainly because Sony revised its estimate of the final outcome of the Bilateral Advance Pricing Agreements related to Sony's intercompany transfer pricing based on the most recent government to government negotiations. Sony believes that the more likely than not outcome will reallocate profits and losses between Sony Corporation and its foreign subsidiaries and, therefore, additional tax expenses were recorded.
Net income attributable to Sony Corporation's stockholders, which excludes net income attributable to noncontrolling interests, was 25.7 billion yen (289 million U.S. dollars) as compared to a net loss of 37.1 billion yen in the same quarter of the previous fiscal year.
To view the full announcement, paste the following link into your web browser:
http://www.sony.net/SonyInfo/IR/financial/fr/09q4_sony.pdf
Investor Relations Contacts:
Tokyo New York London
Gen Tsuchikawa Sam Levenson Yas Hasegawa
+81-(0)3-6748-2180 +1-212-833-6722 +44-(0)20-7426-8696
Home Page: http://www.sony.net/IR/
Presentation Slides: http://www.sony.net/SonyInfo/IR/financial/fr/10q1_sonypre.pdf
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