Sony profit plummets in aftermath of recall

A global battery recall and red ink in its video game business decimated Sony’s profit in the most recent quarter, the Japanese electronics and entertainment company said Thursday.

Sony Corp.’s group profit for the July-September quarter fell 94% to 1.7 billion yen ($14 million), from 28.5 billion yen in the same period the previous year, the Tokyo-based manufacturer said.

An extra cost of 51 billion yen related to a global recall of 9.6 million Sony laptop batteries was a major factor behind the sharp drop in profit for the fiscal second quarter.

Almost every major laptop maker in the world, including Dell Inc., Apple Computer Inc. and Lenovo, has announced recalls of Sony lithium-ion batteries that could overheat and burst into flames.

The recall -- which has tarnished Sony’s brand image as a longtime maker of iconic products such as the Walkman portable player and the PlayStation video game machine -- offset the 8% rise in July-September sales to 1.85 trillion yen ($15.6 billion) from 1.7 trillion yen a year earlier.

In the core electronics segment, Sony’s operating profit shrank 71% to 8 billion yen from 28 billion yen a year earlier.

Sony’s movie business also fared poorly, seeing its operating loss grow to 15.3 billion yen partly on flops such as “Zoom” and “All the King’s Men.” Faring better were “Talladega Nights: The Ballad of Ricky Bobby,” “Monster House” and “Click.”

Sony reported a 43.5-billion-yen operating loss in its gaming division because of charges related to the preparation for the next-generation PlayStation 3 console, set to debut in the U.S. and Japan next month.

Sony said last month that the machine’s launch in Europe would be delayed until March next year because of mass-production problems in a video technology called Blu-ray disk that the machine supports.

The company has also reduced the price in Japan for the much-hyped PS3 by about 20% -- a move that’s likely to reduce revenue because initial shipments are expected to be limited.

Sony kept unchanged Thursday its plan to ship 6 million PS3 machines in the fiscal year through March 2007. Research and development costs for the PS3 eroded profitability in the game unit, the company said.