Things are on the rebound for Sony
Most of the good news this quarter is attributable to the electronics and gaming divisions. Sales of the popular PlayStation 2 helped spur a 500% profit increase in that segment. Demand for computers and digital cameras jumped, keying a turnaround in the electronics division.
One disappointment came from the entertainment and film segment. Thanks to movies such as Men in Black II, Mr. Deeds, and xXx, revenue increased 27%. Profit actually fell 55%, however, because of the huge advertising expenditures needed to promote the flicks.
Company-wide, sales rose only slightly, as most of the earnings came from cost-cutting and restructuring. You can expect that trend to continue; CEO Nobuyuki Idei raised the full-year earnings target by $240 million, while lowering sales projections by $800 million. Saying he's "concerned that consumer confidence may deteriorate even further," Idei will continue the restructuring, while keeping a watchful eye on spending.
Sony's results are typical of many well-run companies these days. While earnings may be on the rise, it remains to be seen if such growth is sustainable.