Feb 3rd - Sony 3Q Net Profit Slips 8.6% As Yen, Thin TV Margins Weigh

Sony Corp. said Thursday its net profit in the October to December period fell 8.6% from a year earlier, weighed by the strong yen and thin margins in its television business.

The Japanese electronics conglomerate reported a net profit of Y72.3 billion for the fiscal third quarter ended Dec. 31, compared with a profit of Y79.2 billion in the same period a year earlier. The figure was above the mean estimate of Y66.96 billion based on six analysts polled by Thomson Reuters.

Revenue slipped 1.7% from a year earlier to Y1.98 trillion, while operating profit dropped 5.9% to Y137.5 billion.

Sony generates about 70% of its sales outside of Japan, leaving the company vulnerable to the yen's appreciation. A strong yen hurts Japanese exporters because it makes their products more expensive abroad, while eating into overseas profit when brought back to Japan.

Echoing similar remarks by rival TV makers Panasonic Corp., LG Electronics Inc. and Samsung Electronics Co., Sony said conditions in its flat-screen television segment remain tough as falling prices squeeze its margins.

One bright spot was in the domestic market, where Sony's sales got a boost in the period from a government stimulus program that provided incentives for consumers to trade in old TVs for more energy-efficient models.

For the full fiscal year to March 31, Sony maintained its forecast for a net profit of Y70 billion and an operating profit of Y200 billion, though it trimmed its revenue forecast to Y7.2 trillion from Y7.4 trillion previously.

Sony's outlook is based on the assumption that the dollar will average Y82 and the euro will average Y110 for the January to March quarter.

Sony reports its earnings under U.S. accounting standards.