Sony's Game Division Losses More than Double

| About: Sony Corporation (SNE)
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Sony reported a surge in fiscal second-quarter profit to ¥73.7 billion ($646M), or ¥70.1/share, after earning only ¥1.7B last year, due among other things to a ¥51.2B charge for a massive notebook PC battery recall. Despite the jump, earnings came up short of some analysts' estimates according to a Bloomberg survey. Group revenues rose 12% to ¥2.08T. Sony's earnings were mixed with wider-than-expected losses at its Games Division (-¥96.7B on +43% sales) and another operating loss for its LCD TV segment, offset by continued strength in digital and video cameras. Overall Electronics division sales rose 21%. Sony's CFO warned the company may miss its 2007 PlayStation 3 sales target of 11M consoles (with 5.6M sold through Sept.), while rival Nintendo continues to boost its target (full story). Sony's Pictures division returned to profitability with operating earnings of ¥2.7B, compared to a loss of ¥15.3B last year. Sony raised its full fiscal year operating profit forecast by 2% to ¥450B, citing one-off gains from the sale of real estate and shares of Sony Financial Holdings. Analysts expect ¥431.5B, according to Reuters Estimates. Sony's ordinary shares lost 1.35% to ¥5,110 ahead of its earnings release. Sony's ADRs lost 1.65% to $45.29 on Wednesday.

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