Sony struggling as profits tumble

Despite an increase in revenue, Sony's profit was down in the third quarter as expected restructuring costs ate into its bottom line.

The Tokyo-based electronics and media company said revenue for the fiscal third quarter 2003, ended 31 December, came in at $21.7bn, up 0.7 per cent from the same period a year ago. However, restructuring costs from job cuts and other operational changes hurt its profit, which was down about 26 per cent year over year and amounted to $866m, or 94 cents per share.

Restructuring charges in the quarter were up from about $130m last year to about $501m. The electronics division, which is the largest contributor to revenue for Sony, accounted for the majority of the restructuring charges, recording about $433m.

After falling behind in many of emerging product categories in consumer electronics, including liquid-crystal display (LCD) televisions and DVD recorders, the electronics unit has been streamlining operations and making some fundamental business changes, which are already paying off.

Sony Electronics has released several new models of flat-panel televisions, DVD recorders and camcorders that have quickly gained share in their respective markets. It has also expanded its share in the digital camera market and has improved its Vaio PC business.

The electronics business saw revenue increase 0.4 per cent, to $13.8bn, as the LCD and DVD product categories grew significantly, taking over for older categories, such as cathode-ray tube (CRT) televisions, which shrank.

Richard Shim writes for News.com