Riding a wave of strength in flat panel television sales, Sony has managed to increase it's net profit for the quarter ended December 31st to ~$1.5 billion today from ~$1.25 billion in the year ago period. This contrasts sharply with the consensus analyst estimate of just under ~$1 billion in profit for the quarter, as well as the cautious words spoken by Sony CEO Sir Howard Stringer earlier this year indicating a likely drop in profits in light of ongoing restructuring.
The strong quarterly result has prompted Sony to drop it's previous guidance of a roughly ~$90 million loss for the year, replaced instead with a new estimate of a ~$600 million net profit.
Leading the strong earnings has been the budding turn-around in Sony's TV operations. Sony has been gaining market share in the LCD TV market at a rapid pace over the last several months, in part on the strength of their newly launched Bravia line. Analysts claim a large contributing factor to Sony's current advantage in the LCD space lies in the advanced seventh-generation LCD joint venture set up with Samsung in 2004, which allows Sony to produce top quality panels while avoiding price and quality fluctuations associated with third-party sourcing. Readers with a strong memory will further note that it was Playstation division head Ken Kutaragi that entered Sony into the joint venture with Samsung when he served concurrently as president of the electronics division; a seemingly risky move at the time, but one that has payed off for Sony.
On the subject of Mr. Kutaragi, for the quarter the Playstation division posted a 52% increase in profits over the same period last year, bringing in ~$580 million on healthy sales of both Playstation 2 and Playstation Portable hardware and software.
Operating profit at the electronics division grew 56% to ~$680 million for the quarter.
