Sony Corp. (SNE) reported a narrower fiscal 2009 fourth-quarter net loss of ¥56.6 billion ($608 million), compared to ¥165.1 billion in the year-ago period. The improved performance was primarily driven by strong Financial Services revenue, robust performance by PC and gaming businesses as well as strict cost containment initiatives.
During the quarter, consolidated revenue grew by 12.5% year-over-year to ¥1.7 trillion ($18.4 billion). The growth was mainly attributable to strong growth in Financial Services and Networked Products & Services segments. Operating loss narrowed to ¥56.0 billion ($603 million) from ¥294.3 billion in the in the year-ago period primarily due to higher sales, improved gross margin and cost containment initiatives.
Segment Details
Consumer Products & Devices
Revenue grew 7.9% year-over-year to ¥643.2 billion ($6.9 billion), primarily due to higher sales of imaging sensors, small-to-mid-sized LCD panels, partially offset by lower sales of Bravia LCD TVs. Operating loss reduced to ¥100.8 billion ($1.1 billion) from a loss of ¥205.1 billion in the year-ago period, primarily due to lower selling, general and administrative expenses and improved product mix.
Networked Products & Services
Sales recorded a robust growth of 21.3% year-over-year to ¥356.5 billion ($3.8 billion). The growth was primarily driven by strong sales of Vaio PCs and gaming related products. The division recorded an operating loss of ¥7.0 billion ($75 million), compared to a loss of ¥40.8 billion in the year-ago period.
B2B & Disc Manufacturing
Sales grew 7.1% year-over-year to ¥105.1 billion ($1.1 billion). The growth was mainly the result of higher sales of Blu-ray discs and broadcast- and professional-use products. Sony recorded a lower operating loss of ¥1.6 billion ($17 million) from the segment, compared to a loss of ¥21.4 billion last year, mainly due better performance in both disc manufacturing and broadcast- and professional-use products businesses.
Pictures
Sales rose by 4.8% to ¥195.6 billion ($2.1 billion), primarily driven by higher home entertainment revenues. Operating income more than doubled year-over-year to ¥33.3 billion ($358 million) primarily due to Sony Pictures Entertainment’s stake sales in HBO Latin America and HBO Central Europe.
Music
Sales recorded a growth of 6.9% to ¥122.5 billion ($1.3 billion) mainly due to new releases, such as Sade’s Soldier of Love, Usher’s Raymond v Raymond and Ke$ha’s Animal. However, the segment swung to an operating loss of ¥608 million ($7 million) from an operating profit of ¥745 million in the prior-year quarter, primarily due to increased talent and restructuring costs.
Financial Services
The segment posted an impressive 44.1% year-over-year growth in revenues to ¥213.1 billion ($2.3 billion) mainly driven by strong gains in its investment portfolio coupled higher premiums recorded at Sony Life. Operating income surged to ¥46.4 billion ($499 million) from ¥944 million in the prior-year quarter, as higher sales were aided by lower provisions related to policy reserves.
Balance Sheet & Cash Flow
Sony ended the quarter with a huge cash hoard of ¥1,191.6 billion ($12.8 billion) and long-term debt of ¥924.2 billion ($9.9 billion), compared to ¥660.8 billion of cash and ¥660.1 billion of long-term debt in the year-ago period. During the fiscal, the company generated ¥912.9 billion of cash from operations and deployed ¥394.4 billion towards debt repayments and ¥338.1 billion towards capital expenditure.
Outlook
Moving forward, Sony expects consolidated revenue of ¥7.6 trillion in fiscal 2010, a growth of 5% over ¥7.2 trillion in fiscal 2009. Moreover, the company also expects to return to a net profit of ¥50 billion in fiscal 2010, after posting losses in the last two fiscal years. Sony also plans to spend ¥450 billion towards R&D expenses and ¥220 billion towards capital expenditure during the current fiscal year.
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