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Friday, April 28, 2006

TVs twist electronics earnings

Sony, Mitsubishi enjoy a comeback; Hitachi struggles


Staff writer

Sales of flat-screen TVs proved pivotal to the fortunes of major consumer electronics makers Sony Corp., Hitachi Ltd. and Mitsubishi Electric Corp. in 2005, according to their annual reports released Thursday.

News photo
People pass by a monitor displaying Sony Corp.'s logo at the Sony Building Thursday in Tokyo.

Strong sales of flat-screen TVs and liquid crystal displays pushed up earnings and profits at Sony and Mitsubishi Electric in the business year to March 31, but Hitachi lagged, suffering a 35.7 billion yen operating loss in the digital media and home appliance sector, which includes flat-panel TVs.

Sony's worldwide share in LCD TVs surged from 9 percent to 15 percent in the fourth quarter of 2005, making it the LCD TV leader in terms of units sold and revenues, according to a survey by DisplaySearch, a unit of market research firm NPD group.

The competition in flat-panel TVs is expected to get even fiercer this year as consumer electronics firms step up promotions, investment, and research and development, the reports indicate.

Sony's pretax profit jumped 82.1 percent to 286.3 billion yen, while sales rose 4.4 percent to 7.48 trillion yen in the reporting year. The company's operating profit stood 191.3 billion yen, up 67.9 percent.

But its net profit fell 24.5 percent to 123.6 billion yen due to the cost of launching the PlayStation 3 game console, which will debut worldwide in November.

Sony's television business saw stronger earnings in fiscal 2005, but still posted an operating loss of 89.8 billion yen due to lower sales of conventional cathode ray tube TVs.

Although the introduction of Sony's new Bravia model pushed up sales, it was not enough to offset the loss, the firm said.

Sony said it expects the flat-screen TV business to move into the black in the second half of the current fiscal year, which ends next March.

Mitsubishi Electric posted a pretax profit of 152.3 billion yen, up 48.9 percent from the previous year, thanks to brisk sales of flat-screen displays and mobile phones in fiscal 2005.

The firm boosted its net profit by 34.4 percent to 95.7 billion yen on sales of 3.60 trillion yen, up 5.7 percent.

Mitsubishi Electric also reported solid numbers, with pretax profit and net profit rising for the fourth straight year.

Strong sales of factory automation systems for the auto industry also helped bolster the company's figures.

Hitachi fared less well, posting a net profit of 37.3 billion yen, down 27.5 percent from the previous year, while its operating profit declined 8.3 percent to 256 billion yen.

But Hitachi's pretax profit rose 3.9 percent to 274.9 billion yen on sales of 9.46 trillion yen, which were up 4.8 percent from a year earlier.

Operating profit for Hitachi's digital device business, which includes LCDs, declined 45 percent to 20.4 billion yen on sales of 1.20 trillion yen, down 9 percent.

Hitachi's flat-panel TV business is expected to remain in the red in the current fiscal year despite its earlier announcement that it might be profitable by the latter half of the fiscal year, it said.



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The Japan Times

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