OREANDA-NEWS. August 9, 2012. Sony Corporation announced its consolidated financial results for the first quarter ended June 30, 2012 (April 1, 2012 to June 30, 2012).

(Billions of yen, millions of U.S. dollars, except per share amounts) First quarter ended June 30

 

2011

2012

Change in yen

2012*

Sales and operating revenue

JPY 1,494.9

JPY 1,515.2

+1.4%

USD 19,180

Operating income

27.5

6.3

-77.2

79

Income before income taxes

23.1

9.4

-59.3

119

Net loss attributable to Sony Corporation’s stockholders

(15.5)

(24.6)

-

(312)

Net loss attributable to Sony Corporation’s

 

 

 

 

stockholders per share of common stock:

 

 

 

 

- Basic

JPY (15.45)

JPY (24.55)

-

USD (0.31)

- Diluted

(15.45)

(24.55)

-

(0.31)

* U.S. dollar amounts have been translated from yen, for convenience only, at the rate of 79 yen = 1 U.S. dollar, the approximate Tokyo foreign exchange market rate as of June 30, 2012.

All amounts are presented on the basis of Generally Accepted Accounting Principles in the U.S. (“U.S. GAAP”).

Sony realigned its business segments from the first quarter of the fiscal year ending March 31, 2013 to reflect modifications to its organizational structure as of April 1, 2012, primarily repositioning the operations of the previously reported Consumer, Products & Services (“CPS”), Professional, Device & Solutions (“PDS”) and Sony Mobile Communications (“Sony Mobile”) segments. In connection with this realignment, the operations of the former CPS, PDS and Sony Mobile segments are reclassified in five newly established segments, namely the Imaging Products & Solutions (“IP&S”), Game, Mobile Products & Communications (“MP&C”), Home Entertainment & Sound (“HE&S”) and Devices segments, as well as All Other. The previously reported Sony Mobile segment is now included in the MP&C segment as the Mobile Communications category. The network business previously included in the CPS segment and the medical business previously included in the PDS segment are now included in All Other. For further details regarding segment and category changes, see page 14.

In connection with this realignment, both sales and operating revenue (“sales”) and operating income (loss) of each segment in the first quarter ended June 30, 2011 have been restated to conform to the current quarter’s presentation.

The average foreign exchange rates during the quarters ended June 30, 2011 and 2012 are presented below.

 

First quarter ended June 30 2011 2012

Change

 

The average rate of yen

 

 

 

 

1 U.S. dollar

JPY  80.7

JPY  80.2

0.7%

(yen appreciation)

1 Euro

115.9

103.0

12.5

(yen appreciation)

Consolidated Results for the First Quarter Ended June 30, 2012

Sales were 1,515.2 billion yen (19,180 million U.S. dollars), an increase of 1.4% compared to the same quarter of the previous fiscal year (“year-on-year”). This increase was primarily due to a significant increase in sales in the MP&C segment, while sales in the HE&S segment decreased significantly. On a constant currency basis, sales increased 5% year-on-year. For further details about sales on a constant currency basis, see Note on page 9.

The increase in sales in the MP&C segment was primarily due to the impact of the consolidation of Sony Mobile Communications AB (“Sony Mobile,” formerly known as Sony Ericsson Mobile Communications AB) as a wholly-owned subsidiary. During the same quarter of the previous fiscal year, Sony Mobile was an affiliated company accounted for under the equity method. On a pro forma basis, had Sony Mobile been fully consolidated in the same quarter of the previous fiscal year, consolidated sales would have decreased by approximately 7%.

This decrease in pro forma consolidated sales was primarily due to significantly lower sales in the HE&S segment.

Operating income decreased 21.2 billion yen year-on-year to 6.3 billion yen (79 million U.S. dollars). This decrease was primarily due to deterioration in MP&C segment results and unfavorable foreign exchange rates.

The current quarter was also unfavorably impacted by higher restructuring charges. Restructuring charges, net, increased 9.5 billion yen year-on-year to 11.3 billion yen (143 million U.S. dollars).

Operating results during the current quarter were also favorably impacted by a net benefit of 16.4 billion yen (208 million U.S. dollars) from insurance recoveries and current period charges relating to damages and losses incurred from the floods in Thailand which took place in the fiscal year ended March 31, 2012, and a benefit of 4.6 billion yen (58 million U.S. dollars) due to the reversal of a Blu-ray DiscTM patent royalty accrual, reflecting a retroactive change in the estimated royalty rate based on the latest license status.

Equity in net loss of affiliated companies, recorded within operating income, decreased 4.6 billion yen year-on-year to 0.3 billion yen (4 million U.S. dollars). This decrease was primarily due to the recording of equity in net losses for Sony Mobile and for S-LCD Corporation (“S-LCD”) in the same quarter of the previous fiscal year. The results of both companies were not included in the equity earnings of affiliated companies for the current quarter.

The net effect of other income and expenses was income of 3.1 billion yen (39 million U.S. dollars) in the current quarter, compared to an expense of 4.4 billion yen in the same quarter of the previous fiscal year. This improvement was primarily due to the recording of a net foreign exchange gain in the current quarter, compared to the recording of a net foreign exchange loss in the same quarter of the previous fiscal year.

Income before income taxes decreased 13.7 billion yen year-on-year to 9.4 billion yen (119 million U.S. dollars).

Income taxes: During the current quarter, Sony recorded 20.0 billion yen (253 million U.S. dollars) of income tax expense. As of March 31, 2012, Sony had established a valuation allowance against certain deferred tax assets for Sony Corporation and its national tax filing group in Japan, the consolidated tax filing group in the U.S., and certain other subsidiaries. During the current quarter, certain of these tax filing groups and subsidiaries incurred losses and as such Sony continued to not recognize the associated tax benefits. As a result, Sony’s effective tax rate for the current quarter exceeded the Japanese statutory tax rate.

Net loss attributable to Sony Corporation’s stockholders, which excludes net income attributable to noncontrolling interests, deteriorated 9.1 billion yen year-on-year to 24.6 billion yen (312 million U.S. dollars).

Operating Performance Highlights by Business Segment

"Sales and operating revenue” in each business segment represents sales and operating revenue recorded before intersegment transactions are eliminated. "Operating income (loss) ” in each business segment represents operating income (loss) reported before intersegment transactions are eliminated and excludes unallocated corporate expenses.