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Sony tops 3Q forecasts
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January 26, 2000: 4:01 a.m. ET
Electronics giant's profit down less than expected on solid computer, TV sales
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LONDON (CNNfn) - Japanese consumer electronics giant Sony Corp. on Wednesday posted a 10-percent drop in earnings for its fiscal third quarter, beating market expectations as strong sales of televisions and Vaio personal computers cushioned the impact of a rising Japanese yen.
The electronics conglomerate said operating earnings fell to 164.2 billion yen ($1.55 billion) in the quarter ended in December from 182.92 billion yen a year earlier. That exceeded analysts' expectations of a drop of at least 20 percent, according to Reuters
"The results beat market expectations, and some analysts may be tempted to raise their target price for Sony shares," said Katsuhiko Sugiyama, an analyst at Paribas Capital Markets Ltd.
Including one-time items, Sony said net profit fell to 93.63 billion yen, or 203.2 yen a diluted share, a 17 percent drop from 112.32 billion yen, or 243.5 yen a share.
Sony, which earns about two-thirds of its profits outside Japan, said a strengthening yen was responsible for the lower numbers. Sales fell slightly to 1.92 trillion yen ($1.8 billion), but would have been 10 percent ahead, excluding the rise in the value of the yen.
In Tokyo Stock Exchange trading prior to the announcement, Sony shares rose 450 yen, or 1.8 percent, to close at 25,480.
A jump in demand for audio-visual equipment helped explain the better-than-expected profit. Sony said its electronic group's operating profit rose 25 percent on hearty sales of its popular Vaio personal computers, as well as digital camcorders and TVs.
Analysts said the third-quarter results confirm Sony's steady recovery from a downturn the previous year, when it was bogged down by Asia's economic woes and a price war in domestic and emerging markets.
However, profit in the company's game division fell 27 percent amid falling yen revenues from sales of the Sony PlayStation game system. And operating income in the music unit also dropped 27 percent amid rising costs to foster new talent and the yen's rise.
Sony is gearing up for the launch of its next-generation PlayStation game console on March 4. 
-- from staff and wire reports
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