Sony will deliver its quarterly earnings for the October to December period on Thursday and many will be watching for signs that corporate reforms are having some effect on the company’s operating profits.
Among the issues likely to be of chief interest to company watchers will be just how well or badly Sony’s recently launched line of Bravia LCD television sets are doing. Sony was late to the flat-panel TV market, despite televisions being a major business for the company, but a sudden slump in demand for its Trinitron tube-based televisions during the first quarter pushed the company into action.
Current indications are that Sony’s Bravia sets have proved popular with consumers.
The company’s market share doubled from the second calendar quarter to the third calendar quarter, according to a market estimate from iSuppli. It said Sony jumped from sixth place, with 5.6%, to third place, with 11% on a unit base. In doing so it passed Samsung Electronics and LG Electronics in the rankings and is less than one percentage point behind Philips Electronics NV.
Howard Stringer, the company’s recently appointed CEO and architect of a sweeping reform at the electronics and entertainment giant, underlined the success during a speech at the International Consumer Electronics Show (CES) in Las Vegas earlier this month.
“Since the launch of Bravia in August 2005, Sony has moved from single-digit market share in dollars to a category-leading 30% of the LCD market,” he said referring to the U.S. market.
Another focus is likely to be the portable audio market. After virtually owning the sector for two decades with its Walkman products Sony stumbled by not responding fast enough to match Apple Computer’s iPod players but has recently been reporting success for its digital audio players.
Throughout the last few quarters a constant problem for Sony and other consumer electronics companies have been the fierce price competition that is cutting into profits. That could hit several of the company’s product groups again but there could be good news on this front from the LCD division, according to a research note from UBS. Sony has switched to using panels from S-LCD, a joint venture it formed with Samsung Electronics, so it has much more control over the cost of the panels and this could help narrow losses.
Among six analysts polled by Thomson Financial, estimates for Sony’s third quarter sales and operating revenue range from ¥2.08 trillion to ¥2.35 trillion. A year ago Sony reported sales and operating revenue of ¥2.15 trillion. The company will announce its earnings at 3 p.m. Japan time on Thursday.
