Tokyo, Japan -- (MARKET WIRE) -- October 19, 2006 --
Sony Corporation
6-7-35 Kitashinagawa
Shinagawa-ku
Tokyo 141-0001 Japan
No: 06-098E
Date: October 19, 2006
SONY ANNOUNCES REVISION OF CONSOLIDATED FORECAST
FOR THE FISCAL YEAR ENDING MARCH 31, 2007
Tokyo, October 19, 2006 -- Sony Corporation announced a revision
of its consolidated results forecast for the fiscal year ending
March 31, 2007 from that announced on July 27, 2006.
Consolidated Results Forecast
Change from
Current previous Previous
Forecast* Forecast Forecast
Sales and operating
revenue Y8,230 billion Unchanged Y8,230 billion
Operating income 50 billion -62% 130 billion
(Restructuring
charges included
within Operating
income 40 billion -20 50 billion)
Income before income
taxes 70 billion -53 150 billion
Equity in net income
of affiliated
companies 40 billion Unchanged 40 billion
Net income 80 billion -38 130 billion
*Assumed foreign currency exchange rates for the second half of the
fiscal year: approximately Y114 to the U.S. dollar and approximately
Y145 to the Euro.
The above revised forecast is primarily a result of the following
factors:
1. Sony plans to record a provision of approximately Y51 billion
within the Electronics segment during the second quarter of the
fiscal year ending March 31, 2007. This relates to charges
expected to be incurred as a result of the recall by Dell Inc.,
Apple Computer Inc. and Lenovo Inc. of notebook computer battery
packs that use lithium-ion battery cells manufactured by Sony
and the subsequent global replacement program initiated by Sony
for certain notebook computer battery packs used by Sony and
other notebook computer manufacturers that use lithium-ion
battery cells manufactured by Sony.
2. A decrease in sales and an increase in operating loss are
expected within the Game segment as a result of the reduction of
the retail price of PLAYSTATION(R)3 ("PS3") hardware in Japan
and the fact that sales and profitability from the PSP(R)
(PlayStation(R)Portable) business are expected to be lower than
originally forecast.
3. Decreased operating income is anticipated within the
Electronics segment due to a production adjustment of devices
for use in PS3 including semiconductors.
4. During the second quarter of the fiscal year ending March 31,
2007, foreign exchange rates trended favorably compared to our
previous forecast as a result of the depreciation of the yen. We
have also changed our assumption for foreign currency rates, as
noted above, to reflect a depreciation of the yen during the
second half of the fiscal year below the rates assumed in the
July 27, 2006 forecast (assumed foreign currency exchange rates
in the July forecast were approximately Y113 to the U.S. dollar
and approximately Y136 to the Euro).
5. Restructuring charges, recorded as operating expenses, are now
forecasted to be Y40 billion, compared to an anticipated
Y50 billion of restructuring charges included in the July
forecast. Due to the successful redeployment of personnel to
growth business areas, early retirement expenses are expected to
be lower than originally anticipated.
Although Sony's consolidated results during the current fiscal year
will be negatively impacted principally by the provision relating to
the aforementioned battery pack recall and global replacement
program, as well as the revision to the PS3 launch schedule, we have
continued to produce hit products in our LCD TV and digital imaging
product categories, including digital cameras, which are both driving
factors behind future business growth, and operating results for our
overall Electronics business continue to recover favorably. With
regard to PS3, although we expect to record a loss for the business
during its initial launch phase within the current fiscal year, we
look forward to the successful worldwide deployment and expansion of
the platform, beginning with the Japanese and North American launch
in November 2006, followed by the European launch in March 2007. As a
result, we expect that we can realize a significant improvement in
profitability during the fiscal year ending March 31, 2008.
Consolidated Results for the Second Quarter of the Fiscal Year ending
March 31, 2007
Consolidated results for the quarter ended September 30, 2006 are
projected to include sales and operating revenue of approximately
Y1,850 billion, an operating loss of approximately Y21 billion, a
loss before income taxes of approximately Y26 billion, equity in net
income of affiliated companies of approximately Y20 billion and net
income of approximately Y2 billion. Restructuring charges of
approximately Y5 billion are included in operating expenses. The
preceding operating loss and loss before income taxes numbers include
the recording of a provision of approximately Y51 billion relating to
charges resulting from the notebook computer battery recall and
global replacement program discussed in note 1 above. The impact to
net income as a result of this provision is approximately Y30
billion. However, please note that the above totals are subject to
confirmation and that Sony's consolidated operating results for the
second quarter are scheduled to be announced on October 26, 2006.
Cautionary Statement
Statements made in this release with respect to Sony's current plans,
estimates, strategies and beliefs and other statements that are not
historical facts are forward-looking statements about the future
performance of Sony. Forward-looking statements include, but are not
limited to, those statements using words such as "believe," "expect,"
"plans," "strategy," "prospects," "forecast," "estimate," "project,"
"anticipate," "aim," "may" or "might" and words of similar meaning in
connection with a discussion of future operations, financial
performance, events or conditions. From time to time, oral or written
forward-looking statements may also be included in other materials
released to the public. These statements are based on management's
assumptions and beliefs in light of the information currently
available to it. Sony cautions you that a number of important risks
and uncertainties could cause actual results to differ materially
from those discussed in the forward-looking statements, and therefore
you should not place undue reliance on them. You also should not rely
on any obligation of Sony to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise. Sony disclaims any such obligation. Risks and
uncertainties that might affect Sony include, but are not limited to
(i) the global economic environment in which Sony operates, as well
as the economic conditions in Sony's markets, particularly levels of
consumer spending; (ii) exchange rates, particularly between the yen
and the U.S. dollar, the Euro and other currencies in which Sony
makes significant sales or in which Sony's assets and liabilities are
denominated; (iii) Sony's ability to continue to design and develop
and win acceptance of, as well as achieve sufficient cost reductions
for, its products and services, which are offered in highly
competitive markets characterized by continual new product
introductions, rapid development in technology and subjective and
changing consumer preferences (particularly in the Electronics, Game
and Pictures segments, and music business); (iv) Sony's ability to
recoup large-scale investment required for technology development,
increasing production capacity and by the Game segment for the
development and introduction of a new platform; (v) Sony's ability to
implement successfully personnel reduction and other business
reorganization activities in its Electronics segment; (vi) Sony's
ability to implement successfully its network strategy for its
Electronics, Game and Pictures segments and All Other, including the
music business, and to develop and implement successful sales and
distribution strategies in its Pictures segment and music business in
light of the Internet and other technological developments; (vii)
Sony's continued ability to devote sufficient resources to research
and development and, with respect to capital expenditures, to
correctly prioritize investments (particularly in the Electronics
segment); (viii) shifts in customer demand for financial services
such as life insurance and Sony's ability to conduct successful Asset
Liability Management in the Financial Services segment; and (ix) the
success of Sony's joint ventures and alliances. Risks and
uncertainties also include the impact of any future events with
material unforeseen impacts.
Investor Relations Contacts:
Tokyo New York London
Takao Yuhara Sam Levenson/Justin Hill/ Shinji Tomita
Miki Emura
+81-(0)3-5448-2180 +1-212-833-6722 +44-(0)20-7444-9713
Home Page: http://www.sony.net/IR/
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