TIDMSON
Sony Corporation1-7-1 Konan, Minato-kuTokyo 108-0075 Japan
No.10-148E
Consolidated Financial Results for the Second Quarter Ended
September 30, 2010
Tokyo, October 29, 2010 -- Sony Corporation today announced its
consolidated results for the second quarter ended September 30,
2010 (July 1, 2010 to September 30, 2010).
-- Consolidated operating income of 68.7 billion yen was recorded
despite unfavorable foreign exchange rates, a significant
improvement
over the loss recorded in the same quarter of the previous
fiscal year.
-- The Networked Products & Services segment, including the game
business and PCs, contributed significantly to the improved
consolidated operating results.
-- Progress in structural transformation initiatives* resulted in
improvement in the cost of sales ratio and the selling, general
and
administrative expenses ratio.
-- Forecasted operating income for the fiscal year has been revised
upward, reflecting favorable second quarter performance, despite
the
expectation of a difficult business environment for the
remainder of
the fiscal year.
(Billions of yen, millions of U.S. dollars, except per share amounts)
Second quarter ended September 30
2009 2010 Change in yen 2010**
Sales and operating revenue ¥1,661.2 ¥1,733.2 +4.3 % $20,881
Operating income (loss) (32.6 ) 68.7 - 827
Income (loss) before income taxes (17.0 ) 62.7 - 755
Net income (loss) attributable (26.3 ) 31.1 - 375
to Sony
Corporation's stockholders
Net income (loss) attributable
to Sony Corporation's
stockholders per share
of common stock:
- Basic ¥(26.22 ) ¥31.04 - $0.37
- Diluted (26.22 ) 31.00 - 0.37
Unless otherwise specified, all amounts are presented on the
basis of Generally Accepted Accounting Principles in the U.S.
("U.S. GAAP").
Supplemental InformationIn 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)
Second quarter ended September 30
2009 2010 Change in yen 2010**
Operating income ¥(32.6 ) ¥68.7 - % $827
(loss)
Less: Equity (12.3 ) 5.1 - 61
in net
income (loss)
of affiliated
companies
Add: Restructuring 32.8 16.5 -49.7 199
charges recorded
within operating
expenses
Operating income, ¥12.5 ¥80.1 +539.6 % $965
as adjusted
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.
*Sony is undertaking structural transformation initiatives to
enhance profitability through implementation of various cost
reduction programs as well as adoption of horizontal
platforms.Restructuring charges are recorded, depending on the
nature of the individual items, in cost of sales, selling, general
and administrative expenses as well as (gain) loss on sales,
disposal or impairment of assets and other, net in the consolidated
statement of income.
** U.S. dollar amounts have been translated from yen, for
convenience only, at the rate of 83 yen=1 U.S. dollar, the
approximate Tokyo foreign exchange market rate as of September 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 revenue ("sales") and operating income (loss) of each
segment in the second quarter ended September 30 of the previous
fiscal year have been revised to conform to the current quarter's
presentation.
Consolidated Results for the Second Quarter Ended September 30,
2010
Sales were 1,733.2 billion yen (20,881 million U.S. dollars), an
increase of 4.3% compared to the same quarter of the previous
fiscal year ("year-on-year"), primarily due to an increase in sales
in all segments other than Music, partially offset by unfavorable
foreign exchange rates.
During the quarter ended September 30, 2010, the average rates
of the yen were 84.9 yen against the U.S. dollar and 109.2 yen
against the euro, which were 9.2% and 21.1% higher, respectively,
than the previous year's second quarter. On a local currency basis,
sales increased 13% year-on-year. For references to sales on a
local currency basis, see the Note section.
Operating income was 68.7 billion yen (827 million U.S. dollars)
compared to an operating loss of 32.6 billion yen in the same
quarter of the previous fiscal year. This was mainly due to an
improvement in the cost of sales ratio and the selling, general and
administrative expenses ratio, partially offset by unfavorable
foreign exchange rates. Operating results in the NPS segment,
including the game business and PCs, improved significantly.
Excluding equity in net income (loss) of affiliated companies and
restructuring charges, operating income on an as adjusted basis
increased by 67.6 billion yen to 80.1 billion yen (965 million U.S.
dollars) year-on-year.
Equity in net income of affiliated companies, recorded within
operating income, was 5.1 billion yen (61 million U.S. dollars)
compared to a loss of 12.3 billion yen in the same quarter of the
previous fiscal year. Sony recorded equity in net income for Sony
Ericsson of 2.6 billion yen (32 million U.S. dollars) compared to
equity in net loss of 10.9 billion yen in the same quarter of the
previous fiscal year. Equity in net income for S-LCD was 2.2
billion yen (27 million U.S. dollars) compared to a net loss of 2.2
billion yen in the same quarter of the previous fiscal year.
The net effect of other income and expenses was an expense of
5.9 billion yen (72 million U.S. dollars), a deterioration of 21.5
billion yen year-on-year, primarily due to a decrease in net
foreign exchange gain and a loss on devaluation of securities
investments.
Income before income taxes of 62.7 billion yen (755 million U.S.
dollars) was recorded compared to a loss of 17.0 billion yen in the
same quarter of the previous fiscal year.
Income taxes: During the current quarter, Sony recorded 20.7
billion yen (250 million U.S. dollars) of income taxes, resulting
in an effective tax rate of 33.1%.
Net income attributable to Sony Corporation's stockholders,
which excludes net income attributable to noncontrolling interests,
was 31.1 billion yen (375 million U.S. dollars) compared to a net
loss of 26.3 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/10q2_sony.pdf
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