Sony swings to a $350-million loss in second quarter
Sony Corp. posted a $350-million loss in its second quarter as sales of LCD televisions and other products in its flagship consumer electronics business deteriorated worldwide, reversing a year-earlier profit of $398.5 million, the company announced Wednesday. The red ink is expected to bleed into Sony’s full fiscal year, which ends in March, resulting in a $1.2-billion loss. It previously had projected a $769-million gain.
Kazuo Hirai, the senior Sony executive expected to succeed Chief Executive Howard Stringer, vowed to cut losses, particularly in the consumer electronics division.
Losses were heaviest in Sony’s consumer electronics business, which posted a $449-million loss on $10.1 billion in sales, down 12.3% from a year earlier.
Sony Pictures was the sole division to report a gain, with profits of $228 million on $2.2 billion in revenue, a boost primarily driven by a one-time sale of its Spider-Man merchandising rights to Walt Disney Co.’s Marvel Entertainment for $278 million. Strong showing of “The Smurfs” in theaters as well as higher sales of DVDs and made-for-cable TV shows helped to offset an overall decline in box-office revenue, the company said.
Sony’s music sales fell 6.6% to $1.3 billion, despite a lift from Adele’s “21” album. The division posted $82 million in operating profit, down 22% from a year earlier.
•Comcast posts strong third-quarter earnings
Cable giant Comcast Corp. reported strong third-quarter earnings Wednesday, holding on to more cable customers than analysts expected despite the sluggish U.S. economy.
Two NBCUniversal units, however, turned in disappointing results.
The Los Angeles-based Universal movie studio mustered weak numbers for the quarter that ended Sept. 30, as poor box-office performance of “Cowboys & Aliens” and “The Change Up” resulted in a 7.8% revenue decline compared with the third quarter of 2010, when the studio was riding high with “Despicable Me.”
Tepid ratings at NBC as well as increased spending for new prime-time programming added to the drag on NBCUniversal’s overall results, but NBCUniversal’s collection of profitable cable television networks — including USA, Bravo, Syfy and E! — bolstered lackluster numbers in the broadcast and film units.
Overall, NBCUniversal generated $5 billion in revenue, a 4.6% increase from the year-earlier period. Cable networks delivered 12% higher revenue, $2.1 billion. The broadcast television division contributed $1.5 billion for the quarter, an increase of 2.9%. The movie studio generated $1.1 billion in revenue compared with $1.2 billion in the 2010 period. Revenue from theme parks, including Universal Studios in Los Angeles, grew 9.1% to $580 million.
Comcast acquired 51% of NBCUniversal in January, and longtime owner General Electric holds the remaining 49%. So far, Comcast’s investment in programming has not paid dividends. During the first six weeks of the new fall season, NBC’s ratings are down 11% in the key demographic of viewers ages 18 to 49. The network already has canceled two new shows: “The Playboy Club” and “Free Agents.”
“It’s only been nine months since we arrived and started making these investments,” NBCUniversal Chief Executive Steve Burke told analysts.
Comcast executives have long said they would spend an additional $300 million this year and in 2012 on broadcast and cable network programming in the wake of NBC’s downward ratings spiral through several years of cost-cutting.
As a whole, Comcast — the nation’s largest cable television provider — generated $14.3 billion in revenue, an increase of 51% over the year-earlier period. Net income was $908 million, or 33 cents a share, up from $867 million, or 31 cents a share, in the third quarter of 2010.
• Time Warner profits soar to $822 million
The final installment of the “Harry Potter” series powered Time Warner Inc.’s third-quarter profits to $822 million, a 57% increase over the same period last year, and revenues of $7.07 billion, a jump of 11%.
The gains were driven by the strong box-office performance of Warner Bros.’ “Harry Potter and the Deathly Hallows: Part 2,” which took in $1.3 billion worldwide. For the quarter, Time Warner’s filmed entertainment unit, which also includes television production, had revenues of $3.3 billion, up 17% from the third quarter of 2010. Operating income rose to $528 million from $209 million.
But Time Warner Chief Executive Jeff Bewkes assured analysts that Warner Bros. was more than a one-man show.
“It wasn’t all about Harry at Warner Bros.,” he told analysts Wednesday. The films “Contagion” and “Horrible Bosses” were also strong performers for the studio.”
Bewkes expressed confidence that the fall slate of Warner Bros.-produced new TV shows, including the sitcoms “Two Broke Girls” and “Suburgatory” and the drama “Persons of Interest,” would be long-term moneymakers for the studio.
Although the company’s film and TV units are on a roll, Time Warner’s Turner Broadcasting is still going through some growing pains. Overall, Time Warner’s networks group, which includes HBO, had revenues of $1.09 billion, an increase of about 6%. Operating income fell 4% to $1.09 billion.
Although the new TNT original series “Falling Skies” was solid and “The Big Bang Theory” repeats are delivering for TBS, much of the other programming on the two networks is struggling.
