Earnings: Sony Beats Estimates With FY1Q07 Profit; Stringer Looks Smart

A substantial turnaround for beleaguered Sony Corp. … delivering a sales increase of 11 percent and doubling analysts’ estimates with a profit of 32.3 billion yen ($281 million), up from a net loss of compared to a net loss of 7.3 billion yen in the same quarter last year. The better numbers resulted from a combination of a weaker yen, strong electronics sales (the Bravia LCD TV line, Sony Vaios, Cyber-shot cameras, etc.) and the cuts in operating costs in the first year of Sir Howard Stringers three-year restructuring plan.
— Not all the news is good. Game segment revenue dropped 29 percent as sales of PS2 hardware and software declined while consumers await the release of PS3 and rival consoles.
— Sony took a $40 million loss on SonyBMG, attributed to lower sales as key releases were delayed to 2H06.
— The venture with Sony Ericsson is faring better, providing net income of $89 million from Sony Ericsson Mobile Communications on a 41 percent sales increase. The JVs are not included in the consolidated financial results.
Bloomberg: “The earnings an endorsement of the strategy of Howard Stringer, who has cut jobs, shut factories and focused investment on fewer products since he was brought in as Sony’s first foreign chief executive 13 months ago.
Update: From the earnings call (via SeekingAlpha.com transcript): Asked about the online strategy for PS3, Sony SVP Takao Yuhara said they’ve already announced more game content will be online and add that more information will be available “at an appropriate time.” In other words, no details.

Earnings
| Slides | Webcast (for overseas investors)| Supplemental