Sony Profitable Again; LCD TVs Sell Briskly

Sony Corp. swung to a better-than-expected operating profit in its fiscal first quarter, propelled by robust sales of LCD televisions and digital cameras, a sign that its recovery is on track.

A weaker yen also helped the electronics and entertainment conglomerate offset valuation losses at its life insurance unit and start-up costs for its PlayStation 3 game console.

The Tokyo-based company’s U.S.-traded shares rose 6% after the earnings were released.

The first-quarter performance “was a relief, particularly because the result shows a substantial improvement in the electronics division’s profitability,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management. The TV-led turnaround in Sony’s electronics unit is potentially significant.

Sony President Ryoji Chubachi has said that there will be no Sony revival without a revival of its TV business. Sony saw sales of its liquid-crystal-display TVs soar fivefold in the latest first quarter from a year earlier.

Sony earned an operating profit of 27.05 billion yen, or $232.5 million, topping a consensus forecast of 18 billion yen in a poll of seven analysts by Reuters Estimates. A year earlier, Sony had an operating loss of 6.58 billion yen.

Net income was 32.29 billion yen in the latest quarter, in a turnaround from a 7.26-billion-yen loss a year earlier, helped by gains from a cellphone joint venture with Ericsson. Sony’s electronics division, which accounts for about 70% of its total revenue, posted a 47.4-billion-yen profit, its first profit for the April-June quarter in two years.

“The biggest contributing factor was television. It was still in the red, but we made substantial progress. We also saw brisk sales of digital cameras, and cost-cutting measures progressed smoothly,” said Chief Financial Officer Nobuyuki Oneda.

The box-office hit “The Da Vinci Code” boosted Sony’s movie division sales by 42% in the quarter, but marketing expenses linked to the release of new pictures such as “Monster House” pushed the business into the red.

Sony will launch PS3, the latest version of its blockbuster game machine, in November. It will compete for holiday buyers’ attention with Nintendo Co.’s upcoming Wii and Microsoft Corp.’s Xbox 360 in the nearly $30-billion video game market.

Sony’s U.S.-traded shares rose $2.56 on Thursday to $45.51.