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Sony Corporation (SNE)
F1Q09 (Qtr End 6/30/09) Earnings Call
July 30, 2009 9:30 am ET
Sam Levenson - Senior Vice President of IR at Sony Corporation of America
Nobuyuki Oneda - Corporate Executive Officer, EVP and CFO
Robert Wiesenthal - Group Executive of Corporate Development and M&A for Sony and EVP and CFO of Sony Corporation of America
Ben Williams - GAM
Daniel Ernst - Hudson Square Research
Previous Statements by SNE
» Sony Corp. Q3 2009 Earnings Conference Call
» Sony Corporation F4Q08 (Qtr End 3/31/09) Earnings Call Transcript
» Sony Corporation F2Q08 (Qtr End 09/30/08) Earnings Call Transcript
I would now like to turn the presentation over to your host for today's call Mr. Sam Levenson, Senior Vice President of Investor Relations at Sony Corporation of America, please proceed sir.
Thank you very much for that introduction Dan and thank you all for joining us today, July 30, 2009 for the discussion of Sony's first quarter results. I'm Sam Levenson, Senior Vice President of Investor Relations at Sony Corporation of America, with me on the conference call tonight is Nobuyuki Oneda, Corporate Executive Officer, EVP and Chief Financial Officer of Sony; Robert Wiesenthal, Group Executive of Corporate Development and M&A for Sony and EVP and CFO of Sony Corporation of America; and Gen Tsuchikawa, Senior General Manager of the Investor Relations division. Thank you all very much for joining us.
In just a few moments, we'll review today's announcement, then we'll be available to answer your questions. Please be aware that statements made during the following remarks and Q&A session with respect to Sony's current plans, estimates, strategies, press release, and other statements that are not historical facts are forward-looking statements about the future performance of Sony. These statements are based on management's assumptions in light of the information currently available to it and therefore you should not place undue reliance on them. Sony cautions you that a number of important factors could cause actual results to differ materially from those discussed in the forward-looking statements. For additional information as to risks and uncertainties, as well as, other factors that could cause actual results to differ, please refer to today's press release which can be accessed by visiting www.sony.net/ir.
With that, I'm now going to turn to today's announcements. Consolidated sales for the quarter decreased 19% year-on-year to 1.5999 trillion yen. This was a decrease of 379.2 billion yen, 163 billion of which can be attributed to exchange rates. On a local currency basis the decrease was 11%. On operating loss of 25.7 billion yen was recorded; a deterioration of 99.1 billion year-on-year, of this deterioration approximately 68 billion yen or almost 70% was due to the appreciation of the yen. Consolidated restructuring charges are 33.9 billion yen were recorded as operating expenses during the quarter as compared to 0.6 billion yen in the same quarter of the previous year.
As we explained at our earnings announcement in May, our restructuring is progressing at a pace which exceeds our original expectations. If we were to adjust for the impact of equity and net loss of affiliates and restructuring charges, we recorded operating income of 23.3 billion yen for the quarter. Loss before income taxes for the quarter was 32.9 billion yen compared to income before income taxes of 62.9 billion yen in the same quarter of the previous fiscal year. Sony recorded an income tax benefit amounting to 12.2 billion yen during the quarter. Net loss attributable to Sony Corporation shareholders was 37.1 billion yen compared to 35 billion yen in net profit recorded in the same quarter of the previous year.
Let's discuss the quarter's results on a segment basis. As I'm sure you're all aware we changed our organizational structure as of April 1, as a result US GAAP requires us to change how we report our segment results. The two most significant changes are the following; first we realigned the Electronics and Games segments and have established three reportable segments where we previously had two; they are the Consumer Products and Devices segment, the Networked Products and Services segment, and the B2B and Disc Manufacturing segment. The Consumer Products and Devices segment contains our television business, our digital imaging business, which includes digital camera and camcorder, our audio and video business, our semiconductor business and our components business.
The Networked Products and Services segment contains our game business, our PC business, and other networked businesses including our digital music player and personal navigation businesses.
In the B2B part of the B2B and Disc Manufacturing, segment we've included our broadcast use products, such as VTRs, cameras, and editing systems, and our professional use products, such as monitors and security cameras. The Disc Manufacturing part of the segment manufactures DVDs, Blu-ray, and other disks for home entertainment and game.
The second significant change is the establishment of a Music segment. As you already know, Sony made its former equity affiliate Sony BMG into a 100% subsidiary in October of last year, changing its name to Sony Music Entertainment. From this quarter Sony Music has been added to Sony Music Japan and Sony/ATV, which previously had been reported in all other, to form a separately reported music segment.
So now let's review the results. First, Consumer Products and Devices. Sales in this segment decreased 27% year-on-year. On a local currency basis sales decreased 18%. This decrease is primarily due to the impact of the appreciation of the yen versus the US dollar and the euro. The generation in the business environment brought on by the slowing global economy and the intensification of pricing competition. On a product category basis, sales of Bravia LCD TVs, Cyber-shot compact digital cameras and Handycam video cameras decreased.