Sony’s electronics are hot, but PS3 leads to wider loss

Consumers are snapping up Sony Corp.’s liquid crystal display TVs, personal computers, camcorders and digital cameras, showing that a revival may be underway in the company’s key electronics division.

Now if only Sony could sell more PlayStation 3s.

Huge development costs for the game station and intense competition with Nintendo’s Wii, with its unique wand controller, dragged down Sony’s fiscal fourth-quarter results, causing its loss to widen to 67.6 billion yen ($563 million) from a loss of 66.5 billion yen a year earlier, the company said Wednesday.

But quarterly sales for the period that ended March 31 rose nearly 13% to 2.01 trillion yen ($16.8 billion), suggesting that Howard Stringer, Sony’s first foreign chief executive, must be doing something right.

Since taking the helm at the faltering Japanese electronics giant in 2005, the Welsh-born American cut unprofitable businesses, trimmed jobs and directed the company to refocus on its core electronics division that gave the world the Walkman.

For the fiscal year, Sony reported net income of 126.3 billion yen, up 2.2% from the previous year.

For the current fiscal year, Sony predicted that its profit would more than double to a record 320 billion yen. Annual sales are expected to grow 6% to a record 8.78 trillion yen.

“The company is definitely headed in a very good direction,” said Mitsuhiro Osawa, electronics analyst at Mizuho Investors Securities Co. in Tokyo. “The results came about because of wise steering on the part of management.”

Sony’s biggest headache appears to be the PlayStation 3, which has lost money since its November launch because of huge costs for developing its sophisticated computer chips and other technology.

Sony also loses money on each console sold and hopes to make it up through the sale of video game titles.

Sony said the PS3 business would probably stay in the red this fiscal year.

Sony shipped 5.5 million PS3 machines worldwide in the fiscal year just ended, fewer than the 6 million the company had targeted. Nintendo shipped 5.84 million Wii machines during the same period.

But Sony is promising a recovery in the gaming unit when the lineup of PS3 titles strengthens over the summer. Sony expects to ship 11 million PS3 consoles in the current fiscal year.

Sony’s biggest improvement came in its electronics unit, where sales for the year jumped in all major regions, gaining 7% in Japan, 8% in the U.S. and 24% in Europe.

The company’s U.S.-traded shares rose $3.15 to $55.85.