Sony’s (SNE) quarterly results had one overwhelming message. Consumer electronics and handsets are the future of the company. Playstation is moving toward the background.
Sony’s operating profit dropped 15% to $1.5 billion, but revenue was up 9.8%. The company said start-up costs and margin pressures from Playstation 3 hurt results but sales of LCD TVs did well as did the company’s handset joint-venture with Ericsson (ERIC).
Sony raised its forecast modestly for the March 07 quarter.
A closer look at Sony’s results shows that electronics operating income rose by 103% to $1.5 billion, equivalent to the operating profit for the entire company. But, the game business had an operating loss of $455 million.
Sony Pictures posted an operating profit of $220 million compared to a loss in the same period a year ago. The film Talladega Nights drove much of the improvement. Operating income at Sony Financial Services was down 46% to $214 million.
For the time being, the Playstation does not matter much to Sony. If consumer electronics can continue to be successful for the company, the key is for the PS3 not to lose too much. Sony might be better off without it.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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