Sony (NYSE:SNE) reported a 94% decline in Q2 net income after the Tokyo Stock Exchange closed today. At a press conference, CFO Nobuyuki Oneda shed some light on the tough business conditions for its Bravia LCD TVs and its PlayStation Portable game device, despite continued sales strength in the former.
In intra-day trading Sony's ADRs are up about 1% at $41.15. Its ordinary shares listed in Tokyo were unchanged at 4,820 yen ($40.64).
Bloomberg.com reports Sony CFO Oneda said the following regarding LCD TV prices:
'Prices of liquid-crystal display TVs in the U.S. will probably fall as much as 30 percent in the year ending March 31. The company's earlier projection was for a maximum price decline of 25 percent.'
"With sales of 37-inch models or larger ones picking up pace, the average selling price of Sharp's LCD TVs dipped only two percent in the first half, while overall LCD prices fell 20 percent."
Sony IR head Takao Yuhara admitted that despite growing sales of LCD TVs, they were unprofitable in Q2.
Sony is optimistic, however, with Oneda commenting:
"Although retail prices of LCD TVs are now falling at a faster-than-expected pace in the US, as Bravia is now selling well, we believe we can turn around the LCD TV business in the third quarter."
Lower-than-expected sales of its PlayStation Portable have forced Sony to reduce its game division's estimated full-year operating revenue by 30 billion yen ($251 million). Sony is facing tough competition from Nintendo (OTCPK:NTDOY), which reported huge first-half earnings today, citing strong sales of its DS handheld console and software. Nintendo raised its full-year (ending March '07) forecast for DS shipments by 3 million units to 20 million total.
Oneda comments on PSP:
"We are now revising down our forecasts of global shipments of PSP to 9.0 mln units for the current term from 12.0 mln units."
In September, Sony reduced the price of its forthcoming PlayStation 3 in Japan, resulting in the estimated operating loss for its game division to reach approximately 200 billion yen ($1.7 billion), from an earlier estimate of 130 to 140 billion yen.
"... we maintain our forecast of global shipments of PS3s at 6.0 mln units by the end of next March."
Source: Bloomberg.com, Forbes.com XFN-ASIA newswire
Disclosure: The author does not own shares of any companies mentioned in this article.