Sony said Thursday its net loss for the fiscal first quarter was 37.1 billion yen ($391 million) compared with a 35 billion yen ($368 million) profit in the April-June period a year earlier. Quarterly sales dropped 19.2 percent to 1.56 trillion yen ($16.4 billion).
The results were better-than-expected because of cost cuts, an easing of the yen's appreciation and gains on the Tokyo stock market, according to Sony, which has music and movie divisions as well as making the Walkman portable music player and flat panel TVs. Analysts surveyed by Thomson Reuters were forecasting a 109 billion yen loss.
Results from other Japanese electronics makers including Nintendo Co., Sharp Corp., NEC Corp. and Fujitsu Ltd. were also dreary and their outlooks were mixed. Consumer spending on goods like video games and other consumer electronics could lag the tentative recovery shown by other indicators. In Japan, the world's second-biggest economy, factory output has been recovering but retail sales have continued to slump amid rising unemployment.
Nintendo, whose popular Wii home console competes against Sony's PlayStation 3, stayed in the black. But the Kyoto-based maker of Pokemon and Super Mario games saw its quarterly profit tumble 61 percent to 42.3 billion yen ($445 million). It blamed a strong yen and fewer hit games. Quarterly sales declined 40 percent to 253.5 billion yen.
Tokyo-based Sony remained cautious and kept its forecast for the fiscal year through March 2010 unchanged at a 120 billion yen ($1.26 billion) loss, citing too many uncertainties about the future.
Ryosuke Katsura, analyst with Mizuho Securities Co. in Tokyo, warned TV panel prices were starting to rise, while price competition for TV sets was intensifying and likely to further erode Sony's profitability in coming months.
Plus if Sony decides to slash PlayStation 3 prices, as analysts widely expect, the move may draw gaming fans but will hit the bottomline, he said.
"It is still too early to assess the second half of the year," said Katsura.
In a plus for the future, Sony said Thursday it had finalized a deal with Japanese rival Sharp Corp. on a joint venture to produce and sell large-size liquid crystal display panels for TVs.
Sony, which has fallen behind in LCD TVs, doesn't make its own LCD panels and now has a joint venture with Samsung Electronics Co. of South Korea.
Sony said it will make an initial investment of 10 billion yen into the new venture with Sharp in Sakai city, central Japan, which will produce 72,000 panels a month. Sony said it will make additional investments later.
The global economic slump continued to batter Sony's sales in the last quarter. Quarterly sales in consumer electronics, such as Bravia TVs, Cyber-shot digital cameras and Handycam camcorders, plunged 27.3 percent from a year earlier.
Sales of the PlayStation 3 fell to 1.1 million from 1.6 million the same period the previous year, while PlayStation Portable sales declined to 1.3 million from 3.7 million.
Gadget prices have been dropping amid intense competition, making it tough for Sony to eke out profits.
In contrast to its money-losing electronics and gaming units, Sony's entertainment divisions were profitable.
Sales were up 6.5 percent at Sony Pictures Entertainment, which swung into the black from losses the previous year on the success of Hollywood releases such as "Angels & Demons" and "Terminator Salvation."
Sales doubled at its music division after Sony Music Entertainment became a wholly owned Sony subsidiary in October, offsetting the damage from a sluggish global music industry.
Best-selling albums during the quarter were Bob Dylan's "Together Through Life," Dave Matthews Band's "Big Whiskey and the GrooGrux King," and Kings of Leon's "Only by the Night," according to Sony.
NEC, meanwhile, racked up a 33.8 billion yen ($356 million) quarterly loss as sales dropped 22.3 percent to 778.5 billion yen ($8.19 billion). But NEC said the downturn appeared to be easing.
Sharp, the maker of Aquos flat-panel TVs, sank to a 25.2 billion yen ($265 million) loss for the April-June period, as a companywide effort to cut costs failed to offset plunging demand.
Fujitsu reported a 29.1 billion yen ($306 million) loss for the fiscal first quarter, as quarterly sales dipped 11.3 percent to 1.044 trillion yen ($10.99 billion).
Still, it raised its forecast for the full year through March 2010, citing rebounding demand for electronic components. Fujitsu now expects 25 billion yen ($263 million) in profit.
Sony shares rose 6.8 percent to 2,505 yen ($26) in Tokyo. Nintendo jumped 2.6 percent to 26,820 yen ($282), while NEC gained 2.8 percent to close at 327 yen ($3.4), Sharp rose 3.9 percent to 1,029 yen ($10.8) and Fujitsu edged up 3.1 percent to 594 yen ($6.2). Earnings were released after trading ended on the Tokyo Stock Exchange.