SONY BACK IN THE BLACK

Third Quarter Sales Jump 10%; Electronics Division Reports 56% Rise in Profits

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YORK, Pa. (AdAge.com) -- Sony Corp. is back in the black, surprising many with a third-quarter sales jump of 10% year-over-year, and revising its year-end forecast to project a gain for the first time in years. The Sony Electronics division led the charge, with a 5% jump in sales and a whopping 56% rise in profits following aggressive fall product marketing campaigns for its Bravia LCD televisions, Handycam camcorders and VAIO computers.
Sony's PSP is just one of the new electronic devices that are again catching on with consumers.

Sony’s hot handheld PlayStation Portable, or PSP, also boosted earnings with a more than 40% sales gain year-over-year, although that was somewhat expected. The Sony Ericsson wireless phone division did well with a 15% increase in sales, with Walkman phones and camera phones specifically cited. In fact, the only negative on earnings was the Sony Pictures division, which posted losses of 10% year-over-year.

In further good news that rallied Wall Street, Sony upgraded its next quarter estimates to a gain of more than $600 million, from a previously projected loss.

The marketer will continue its cost-cutting efforts, including discontinuing several product lines such as its premium Qualia products that occupy stores-within-a-store inside several SonyStyle retail locations; its Aibo and Qrio robots; and its PDP, or plasma, TV products.

The positive financial news comes just eight months after Chairman-CEO Howard Stringer took the helm of the global giant, promising collaboration among divisions and cost reductions across the board as part of his turnaround plan.

“It’s taken them a while to figure out where they’re going and how to leverage their strengths to get there, and really, how you live in a whole different world,” said Steve Baker, analyst with NPD Group. “It’s been a struggle for all the Japanese companies ... but I think we can finally point to the fact that most of them have pulled themselves out of that tailspin.”

Sony stands poised for a similarly successful year in 2006 with heralded product releases coming, including high definition Blu-Ray DVD player/recorders, the PlayStation 3 gaming console, and the release of the movie based on the blockbuster book “The Da Vinci Code.”

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