Sony Q1 financials hit by double whammy

Cyber attack and the earthquake/tsunami takes its toll on profit and turnover

Japanese electronics giant Sony’s latest financials have revealed the extent of the PlayStation Network cyber attack scandal and the earthquake/tsunami double whammy.

For the quarter ended 30 June 2011, the firm had a 60 per cent drop in total operating profit to 27.5bn Yen ($240m), down from 67bn Yen posted in the same quarter the previous year.

Turnover dropped 10 per cent to 1,494bn Yen ($18.4bn) from 1,661bn Yen posted in 2010. Sony attributed this to the negative impact of the Great East Japan Earthquake, the deterioration of the electronics business environment and unfavourable exchange rates.

The firm claimed that the earthquake cost it a total of 5.3bn Yen ($66m) for the quarter – mainly because of the cost of repairing, removing and cleaning buildings, machinery and equipment as well as lost stock stored in factories and warehouses.

Sales for its professional, device and solution business dropped 16.5 per cent, with an 87 per cent drop in profit. Again this was attributed to the earthquake's damage to manufacturing equipment and also market contraction, which hit its components business particularly hard.

Sales in its consumer products and services division dropped by just under 18 per cent compared with 2010. The vendor attributed this to a decrease in LCD television revenue owing to price declines and tough market conditions in the US and Europe. PC revenue also dropped because of increased pricing competition, Sony said.