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Sony Sees Profit in 1st Quarter

July 02, 2002|From Bloomberg News

Sony Corp., in a reversal, said it probably earned a profit in its fiscal first quarter, bolstered by its record-setting "Spider-Man" movie.

Earnings at Sony's entertainment units are helping counter losses elsewhere at the world's second-largest maker of consumer electronics, investors said. Sony, which said in April that it expected an operating loss in the period, didn't elaborate on a statement on expectations for a fiscal first-quarter group operating profit.

"We didn't think Sony's movie business would turn out such profits," said Kiyohide Nagata of Prudential Asset Management Japan Inc. "Its movies are helping the company hedge business risk."

Sony, whose shares lost a quarter of their value in the last year, faces slowing demand for hard disk drives, chips and tube monitors. Its shares fell 2.8% in Japan and dropped about 2% in Europe.

The company made its announcement after a report in the Nihon Kezai newspaper Saturday that the firm probably had a group operating loss of $41.7 million in the quarter because of slowing sales of its Vaio personal computers and other consumer electronics, which account for 70% of sales.

Sony had an operating profit--the amount left over after sales and administrative costs are subtracted from revenue--of $25 million in the year-ago period.

First-quarter earnings were led by Sony's movie business, which released films such as "Spider-Man" and "Panic Room," the company said. Since May, "Spider-Man" grossed almost $400 million in North America. Sony's Columbia Pictures also is behind "Mr. Deeds," the highest-grossing film at the box office this weekend.

In the year ended March, Sony's movie business generated about a quarter of its operating profit of $1.2 billion.

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