Following a Big Year, Sony Profit Plummets 98%

Citing a slump in sales of television sets and a disappointing run of summer movies, Sony Corp. on Thursday reported a whopping 98% decline in profit for its fiscal first quarter.

Sony executives told analysts that the Tokyo-based consumer electronics and media giant earned $9 million, or 1 cent a share, in the first quarter of its 2003 fiscal year, down from $481 million, or 49 cents, in the same period last year. Sales fell to $13.4 billion from $14.5 billion.

Takao Yuhara, Sony’s chief financial officer, said the company still expected to meet its target of a $421-million profit on $62 billion in sales for the full fiscal year.

Though the quarterly numbers were bleak, they weren’t completely unexpected. Much of the plunge was because of comparisons with last year’s earnings bonanza from the success of the film “Spider-Man.”

Facing a steady slump in sales in the firm’s core business of making televisions, portable CD players and digital cameras, Sony Chief Executive Nobuyuki Idei has launched a massive corporate and philosophical overhaul to turn the company’s finances around.

Both analysts and company executives note that it will take time for Sony’s financial situation to improve noticeably because of the changes.

“There are no signs of recovery in electronics sales so far,” said Kazuharu Miura, analyst at Daiwa Institute of Research in Tokyo. “But Sony is promising new products ahead of Christmas. And so prospects aren’t going to be clear until Christmas.”

Today, nearly every unit needs a boost. Operating profit for the electronics business, the company’s biggest, fell to $107 million from $413 million as sales dropped to $9.2 billion from $11 billion. Even the company’s top performer -- its video game group -- has suffered a decrease in hardware and software sales. Its operating profit dropped nearly 32% to $15 million, and sales slumped 18% to $1 billion.

Sony said it expected to roll out PSX, an all-in-one audio, video and games device, in Japan this year and North America and Europe early next year.

Shares of Sony rose 20 cents Thursday to $31.61 on the New York Stock Exchange.

Associated Press was used in compiling this report.