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Sony is a loser by $ 810 million |
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July 27, 2000
TOKYO (AP) - Sony Corp. said Wednesday that a one-time write-off in its movie business led to a loss of 88.29 billion yen (dlrs 810 million) for the April-June quarter although sales were up overall. The loss for the first quarter of the fiscal year ending in March 2001 compares with a year-earlier net profit of 18.43 billion yen (dlrs 169 million) in the same period. Group sales for the quarter of 1.56 trillion yen (dlrs 14.3 billion) were up 5.4 percent from 1.48 trillion yen (dlrs 13.6 billion) a year ago, despite a rising yen which hurt sales, Sony said. Sony wrote off 101 billion yen (dlrs 926 million) of advertising costs and development expenses in canceled projects in the first quarter of this fiscal year because of a change in U.S. accounting standards for producers and distributors of films. The new accounting standards require companies promptly to write off their film promotional expenses when they arise. Under the previous standards, companies could write off the expenses over up to 10 years. Sony said its sales were up in the electronics operation, the movie business, insurance and other operations, while they were flat in the game business and down in music. Profits rose in the electronics and insurance businesses, while the game, music and movie businesses saw losses. The electronics operation saw higher sales in both semiconductors and consumer products such as PCs, digital cameras, TVs and DVD players. The game business saw sales rise in Japan on PlayStation 2 hardware and software, but there was a significant drop in PlayStation sales in the United States and Europe. Overall sales were almost flat. Startup expenses for PlayStation2 and the drop in U.S. and European sales led to the game business operating losses. Sales fell at Sony Music Entertainment. Best-sellers included Pearl Jam, Destiny's Child and Cypress Hill. Sony Pictures' sales rose about 21 percent, primarily on home video sales, including "Stuart Little," and continued strong DVD sales. But losses were recorded because of the adoption of the new accounting standard as well as losses on films, "I Dreamed of Africa" and "Running Free." |