Sony Loves Movies, but Not the PS3: Fool by Numbers

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On Jan. 30, Sony (NYSE: SNE) released third-quarter earnings for the period ended Dec. 31.

• Revenues increased 9.2% led by a strong performance by the Pictures segment with the releases of The Da Vinci Code, Talladega Nights: The Ballad of Ricky Bobby, and Click.
• While overall sales rose 5.6% in the game segment from the release of the PS3, the company recorded $455 million dollars in operating losses from "the loss arising from the sale of PS3 at strategic price points." This affected the bottom line, which declined by 6.1%.
• Sony is only a one-star stock in CAPS, our new interactive stock database, with the Foolish community torn about whether this company will beat the S&P 500.

(Figures in millions, except per-share data)

Income Statement Highlights

	Q3 2006	Q3 2005	Change
Sales	$21,913	$20,064	9.2%
Net Profit	$1,344	$1,432	(6.1%)
EPS	$1.28	$1.37	(6.6%)
Diluted Shares	1,048.7	1,045.6	0.3%

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Margin Checkup

	Q3 2006	Q3 2005	Change*
Gross Margin	30.2%	33.5%	(3.3)
Operating Margin	6.9%	8.6%	(1.7)
Net Margin	6.1%	7.1%	(1.0)

*Expressed in percentage points.

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Balance Sheet Highlights

Assets	Q3 2006	Q3 2005	Change
Cash + ST Invest.*	$10,268	$9,684	6.0%
Trade Notes and Accounts Rec.	$15,220	$12,276	24.0%
Inventory	$8,119	$6,369	27.5%

Liabilities	Q3 2006	Q3 2005	Change
Accounts Payable**	$18,033	$14,871	21.3%
Long-Term Debt	$8,430	$5,513	52.9%

*Includes marketable securities. **Includes accrued expenses.

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Cash Flow Highlights

	YTD 2006	YTD 2005	Change
Cash From Ops.	$1,318.0	$1,053.0	25.2%
Capital Expenditures	$3,447.0	$2,765.0	24.7%
Free Cash Flow	($2,129.0)	($1,712.0)	N/A

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Related Companies:

• Matsushita Electric Industrial (NYSE: MC)
• Koninklijke Philips Electronics (NYSE: PHG)
• Microsoft (Nasdaq: MSFT)

Related Foolishness:

• Sony Pays Up
• Time to Tune Out Sony
• A Wii Dilemma for Sony
• Sony vs. Zelda

Microsoft is an Inside Value recommendation. To see what other companies have been recommended, take a free 30-day trial today.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.