Sony Profit Better Than Expected

Sony Corp. said Friday that its fiscal third-quarter profit fell less than expected as the Japanese consumer electronics giant benefited from a weaker yen and a Christmas surge in PlayStation 2 game console sales.

Net income fell 14% to $475 million, or 48 cents a share, in the three months ended Dec. 31.

Sony sold 5 million PlayStation 2 consoles in December, leading a 7% surge in sales to a record $17billion and prompting the company to raise its sales and operating profit forecasts for the year. The weaker yen helped the electronics business, which makes Wega televisions and Mavica digital cameras, post its first profit in four quarters.

Third-quarter net income was higher than the average $290-million profit forecast by four analysts surveyed by Bloomberg News.

The company raised its annual sales forecast to $56.1 million and boosted by almost a tenth its outlook for operating profit--the amount left after manufacturing, selling and administrative expenses are subtracted from sales-- $968 million.

Sony attributed the increases to the effect of the weaker Japanese currency, which raises the value of Sony’s overseas sales when converted back to yen. A 1-yen decline against the dollar boosts Sony’s yearly operating profit by $60 million, the company said.

In the third quarter, PlayStation2 shipments almost doubled to 5.42 million units compared with a year ago, contributing to an operating profit of $494 million as sales at the company’s game business soared 63% to $2.8 billion.

Sales at Sony’s music division rose almost 11% to $1.5 billion. Sales at the movie division rose 12% to $1.2 billion. Music sales were helped by higher sales in Europe and the benefits of efforts to cut costs, the company said. The company’s movie division eked out a profit compared with a loss in the year-ago period. Operating profit was $2million.

Sony said its movie business was hampered in the quarter--sales were almost unchanged on a U.S. dollar basis--by lower theatrical sales because of the timing of movie releases, including the poor performance of “Riding in Cars With Boys.”