I tend to be bearish on Sony
Sony boosted its net income 91.5% to $540 million, or $0.51 per share. Sales increased 5.5% to $16.1 billion. Highlights included electronics, based on the strength of Cybershot digital cameras, the Bravia television, and Handycam video cameras. The segment also benefited from a favorable depreciation of the yen versus the dollar.
Meanwhile, for all of us following the company's PlayStation 3 progress, a recent price cut to 60 GB PS3 models -- more like a clearance sale, really -- is working some magic. The San Jose Mercury News reported that the lower price managed to double sales of the PS3 console.
Of course, on the downside, the company's quarterly press release said that Sony's operating loss for its game segment increased, primarily due to a factor many of us already expected. Sony's had to price the PlayStation 3 lower than its production cost to help drive sales and compete with Microsoft's
Meanwhile, even the market for popular flat-screen televisions didn't help Sony too much. Although Sony may have impressive products to lure consumers with, its numerous competitors make eventual price cuts seem all but inevitable.
Some observers are highlighting the weaker yen's assistance to Sony's results. The company left its forecast for the year unchanged -- understandable, given fears that macroeconomic concerns might prompt slower sales of consumer electronics. Although Sony's first quarter may have heartening signs, a cautious outlook still seems wise for Foolish investors.
Further sleek, high-tech Foolishness:
- Sony recently cut the price on 60 GB PS3 consoles.
- In May, one Fool wondered if Sony was really turning the corner.
- In April, another Fool wondered if it was time to short Sony.