Wednesday, Hewlett Packard and Sony both released quarterly earnings. HP narrowly beat analysts estimates but there was little surprise after an accidental leak of news last week. The news for both companies was mixed.
Sony’s reported a Q4 loss of 67.6 billion yen ($563 million) down from a loss of 66.5 billion yen a year earlier. The loss was attributed to substantial development costs for the PS3 and the intense competition with Nintendo’s Wii. Sales for the quarter were up nearly 13% to 2.01 trillion yen ($16.8 billion). For the fiscal year, Sony reported net income of 126.3 billion yen ($1.04b), up 2.2% over the last year.
Sony was extremely optimistic and aggressive in guidance provided for the next fiscal year. CEO Howard Stringer has set a goal of generating $5 of profit for every $100 in sales. (The company’s 5% operating profit margin target can be compared against a 12.7 percent margin at Apple Inc.) To meet the goal, Sony is forecasting they will cut PS3 losses by near 80% through increased sales and decreased production costs. The game unit is projecting a loss of 50 billion yen ($414 million) for the year ending March 2008, well below Bloomberg’s analyst survey of 83 billion yen.
Sony also expects to increase sales of their Bravia television line. Overall guidance is for a near doubling of net income to 320 billion yen ($2.7b) for the next fiscal year. Consumer electronics will account for a substantial portion of that but there should also be a significant increase in film related revenue thanks to Spider-Man 3 and the expected fall release of the latest movie in Sony’s popular Resident Evil film franchise.
More detailed press coverage on Sony’s finances can be found at:
HP reported revenue for Q2 was up 13% to $25.5 billion. Net income was down 7% to $1.78 billion compared with $1.9 billion for the same period last year. Earnings per share came in at 65c, down 1c over the same period last year. Adjusted for a one–time charge, EPS would have been 15 cents/share.
CEO Mark Hurd noted in the conference call that this was “[HP's] strongest quarterly revenue growth since the year 2000.” The company raised its revenue guidance for the year to a range of $100.5 billion to $100.9 billion, up from its prior guidance of $99 billion.
More detailed press coverage on HP’s finances can be found at: