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Sony profit almost halved

Flat sales blamed

Sony saw its net profit almost halve during the quarter from July to September as overall sales stalled, the company said today.

Sony, which is facing tough competition in many of its key product categories, said net profit for its fiscal second quarter was ¥28.5 billion (£141 million as of September 30, the last day of the period reported), down 47 percent on the same period a year earlier, on flat sales of ¥1.7 trillion.

Sony had some success in its key electronics division, including its recently launched Bravia line of flat-panel televisions and HDV high-definition camcorders. However, overall sales of consumer products dropped by 8 percent from the same period a year earlier. Strong sales of other products, including chips and PC components, meant the electronics division as a whole registered only a slight sales decrease year-over-year.

Sales from the electronics group were ¥1.2 trillion and the operating profit was ¥17.3 billion. The operating profit was more than double that achieved last year, although Sony said this came solely as the result of a ¥63.9 billion gain from the transfer of a pension fund to the Japanese government. Without that one-off gain the division would have plunged into the red.

Results from the company's gaming division, Sony Computer Entertainment, were brighter. Sales were ¥214.2 million during the period, up 79 percent on the same period a year earlier, thanks to strong sales of the Playstation 2 in Europe and North America and the addition of the PSP, which wasn't on the market a year ago. Operating profit at the division was ¥8.2 million compared to a small operating loss last year.

Shipments of the PlayStation 2 reached 5 million units during the three-month period, up 3 million from a year earlier, and PSP shipments were 3.8 million, Sony said.

As a result of the strong performance, Sony increased its shipment forecast for the full year to 14 million units of both the Playstation 2 and PSP. It's the second consecutive raise in forecasts for both products. In April this year Sony pegged 2005 shipments at 12 million units of each device. In July raised this to 13 million of each device.

Last year Sony shipped 16.2 million Playstation 2 consoles and just under 3 million PSPs.

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