Sony announced FYQ1’08 (April – June 2008) earnings on July 29, 2008. Sony trails Samsung as the world’s second largest consumer electronics company. I will spotlight some interesting trends that were presented by Sony:
1. Electronics Inventory: Inventory for Sony’s electronics division swelled in FYQ1’08 to 57 days (up 4 days). Inventory increased 23.6% Q/Q and 9.4% Y/Y to JPY1,016 billion yen. This is JPY87.6 billion more than FYQ1’07 and a significant increase of JPY193.9 billion from the end of March 2008. Inventory is certainly increasing. With expected price cuts from competitors for LCD TVs as well as a decrease in LCD panel manufacturing (LGD, CMO) are all efforts to maintain a healthy supply and demand balance.
2. BRAVIA LCD TV: Sony is maintaining its BRAVIA LCD TV unit shipment forecast of 17 million units for FY’08, which is 6.4 million units more than what Sony shipped in FY’07. BRAVIA LCD TV sales in the US, Europe and ROW increased. But the overall operating income from Sony’s Electronics operations declined from JPY103.5 billion in FYQ1’07 to just JPY44.4 billion in FYQ1’08 due to many factors including the appreciation of the yen against the US dollar.
3. LCD Sales: Sony’s joint venture with Samsung is S-LCD. Sales in FY’07 was JPY130 billion and the forecast for FY’08 is the same at JPY130 billion. This level of sales is somwhat depressed compared to JPY140 billion in sales in FY’06.
3. More cautious outlook for the Electronics segment. Detailed reasons for a more cautious outlook were absent, but it is clear that Sony is also experiencing a less-than-expected demand for its electronics gear.
Source: Sony (PDF)
[tags]Sony, Sony Electronics, Sony BRAVIA LCD TV, S-LCD, Samsung, BRAVIA, BRAVIA LCD TV[/tags]