Sony TV Profit Jumps on Bravia LCD Sales

By Danny King

Sony said today that its fiscal first-quarter television earnings rose as it dropped prices to sell more of its Bravia liquid-crystal display TVs. The company also said unit sales of its PlayStation 3 video game consoles, which include Blu-ray players, doubled while its Blu-ray set-top players and recorders would account for almost a quarter of the machines it will sell for the year ending March 31, 2009.

The world’s second-largest LCD maker behind Samsung said TV sales for the quarter ended June 30 jumped 32% to 311.5 million yen ($2.94 billion) from 235.2 million yen a year earlier. Bravia profit, which Sony said “improved” without disclosing specifics, failed to offset price drops in the digital and video camera markets, causing earnings from Sony’s electronics unit to plunge 57%, despite the division’s revenue being little changed.

Sony’s TV operations withstood a worldwide drop in LCD prices caused by increased competition. In North America, where Sony was No. 3 in unit market share behind Samsung and Irvine, Calif.-based upstart Vizio but second in dollar share behind Samsung, the average selling price of all TVs will drop about 5% this year, while the average price of a 32-inch LCD will plunge 14%, according to DisplaySearch.

The company said it will sell 17 million Bravias for the year ending March 31, up 60% from the 10.6 million it sold a year earlier.

Last week, Samsung said its second-quarter loss from TV-making operations widened as it dropped prices and paid more for materials to keep its worldwide lead among LCD TV manufacturers. The prior week, Dutch conglomerate Royal Philips Electronics, the world’s No. 5 liquid-crystal display TV maker, said it took a second-quarter loss on its television operations from restructuring charges as it prepared to outsource its TV sales in North America to cut operating losses.

Sony sold 1.56 million PlayStation 3 players during the quarter, up from 700,000 a year earlier, helping sales of its games unit rise 17% while turning an operating profit. For the year ending March 31, the company said it will sell 2.5 million Blu-ray disc players and 600,000 Blu-ray recorders among the approximately 14 million Sony DVD players and recorders it will sell.

Sony said last month that it expects its LCD TV business to be the world’s largest within three years. It also said its Blu-ray-related business will approach $10 billion in annual revenue within three years, while its games and liquid-crystal display television operations will return to profitability.

The loss in electronics caused the parent company’s net income to fall 47% to 35 billion yen ($330 million) from a year earlier. Sony’s total sales were little changed at 1.98 trillion yen ($18.7 billion), the company said today.