Earnings: Sony Q3 Profit Plunges on PS3 Delays, Battery Recall

As expected, Sony’s fiscal second quarter results weren’t great. Profit plunged by 94 percent (in yen) to 1.7 billion yen ($14.3 million). Revenue rose 8.3 percent to 1.85 trillion yen, according to the earnings release. The company’s woes are plenty, ranging from delays of the PlayStation to the recall of laptop batteries that caught fire in some cases. Add to the list a bigger-than-expected decline in television prices in the U.S. and intense price competition and you can see why investors are taking a wait-and-see attitude toward Sony.
— Sales at the electronics unit rose 12 percent and the movie division posted a loss. Sony disclosed last week that it would take an operating loss of $428.9 million to cover the costs of the battery recall. Plus, it expected a wider loss at the gaming unit because of cuts to the PlayStation which it will begin selling next month.
— Sales in the games segment fell 20.5 percent because of lower demand for PlayStation Portable. Overall, the business had a 43.5 billion yen ($369 loss in the gaming unit, which has faced unusually strong competition from rival Nintendo. During the quarter, Sony shipped 5 million PS2s and 3.89 million PSPs.

Earnings Release|Conference Call (replay) | Presentation Slides | Transcript (SeekingAlpha.com)