Despite analyst predictions that Sony's third quarter profits could fall by as much as 50 percent, the company has beaten its own profit estimates and raised its annual forecasts, even as the game division continues to suffer from the expense of the PlayStation 3 launch.
As a whole Sony Group saw consolidated sales and operating revenues of ¥2.61 trillion ($21.42bn), up 9.8 percent on the previous year. Net income did fall to ¥159.9 billion ($1.31bn), but only by 5.3 percent, rather than the 50 percent suggested only yesterday by a group of five separate analysts polled by Bloomberg
. The analysts had suggested a net income figure of ¥84.1 billion ($0.69bn) on revenues of ¥3 trillion ($24.63bn).
The results for Sony's game division were less positive, with sales up only 5.6 percent to ¥442.8 billion ($3.63bn), despite the launch of the PlayStation 3. The division reported an operating loss of ¥54.2 billion ($0.44bn), compared to a profit of ¥67.8 billion ($0.56bn) at the same time last year, as a result of manufacturing and marketing costs associated with the North American and Japanese launches.
The company again stated that 2 million units of the PlayStation 3 had been shipped in the two months after launch, making it he fastest selling PlayStation platform so far. The exact total for the third quarter was put at 1.84 million consoles sold - 0.81 million in Japan and 1.03 million in North America. By comparison, the PlayStation 2 sold 4.11 million units during the period, down by 23 percent on the same time last year. The PSP saw sales drop even further, by 72 percent, to 1.76 million in total.
A new worldwide total for PlayStation 2 global sales was given as 115.36 million, with 24.76 million sold in Japan, 46.53 million in North America and 44.07 million in the rest of the world. The PSP's worldwide userbase is put at 24.70 million by Sony, with 6.23 million sold in Japan, 9.58 million in North America and 8.89 million in the rest of the world.
Software sales for the third quarter were down by 16 percent for the PlayStation 2 at 78 million, with PSP sales up by 24 percent to 21.2 million. Initial software sales for the PlayStation 3 were put at 5.2 million.
The company's core electronics business saw operating income rise by 102.8 percent, thanks to better than expected sales of the Bravia range of high end televisions and Cybershot cameras. Sony Pictures saw a profit of ¥26.2 billion ($215m), up from a small loss last year, while the group's financial services division saw profits fall by 45.9 percent.
Not only did Sony beat expectations, but the company also raised its profit forecasts for the full year ended March 31st, from ¥80 billion ($0.66bn) to ¥110 billion ($0.90bn).
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In his latest investor note, Lazard Capital Markets' Colin Sebastian said that Sony's comments on its PlayStation sales were "generally in line with expectations; thus, we are not changing our industry model for 2007," adding that the group expects the game software market to reaccelerate in 2007.
In its investor call, Sebastian notes that Sony reaffirmed a shipment target of six million PS3s for the year. The company shipped more than a million units to North America during the quarter, selling just under 700,000. Sony has noted that its tie ratio for the console was 2.8x, including 4.1x in North America and 1.2x in Japan.
Looking beyond the launch of the PS3, Sebastian notes that Sony management maintains that PS2 demand remains quite strong, and is increasing PS2 shipment outlook from 11 to 13 million for the fiscal year. Sony initially guided shipments of 12 million for the last fiscal year, but in the end shipped more than 16 million, he notes.
On the PSP, Sebastian adds that the company is maintaining its guidance of nine million units for the year, despite slower sales, with management indicating it expects PSP demand to increase next year -- a projection Sebastian believes could come from a PSP price reduction and/or enhancements to the handheld.