Sony (SNE) has dropped 18% since October 28, 2011. The sell-off was mainly due to the company's disappointing second quarter results. Sales decreased year-on-year, mainly due to the negative impact of the exchange rate and the decreasing sales of LCD TVs. CPS segment sales decreased 12%. This was primarily due to LCD TV sales price declines, resulting mainly from deterioration in market conditions in the Western markets, unfavorable foreign exchange rates and lower PC sales which reflected price competition. Operating loss was ¥34.6 billion, compared to plus ¥1.0 billion in the same quarter last year. This decrease was driven primarily by deterioration in the cost of sales ratio and decreasing gross profit resulting from the decrease in sales.
The company's game business sales, which include network service revenues, decreased year-on-year due to the strategic price reduction of PS3 hardware undertaken in August in advance of the year-end holiday selling season. The PS2 business as a whole continues to have steady demand in developing countries, but has peaked out and is shrinking. Operating income for the game business has decreased year-on-year as well. Although Sony continues to reduce the manufacturing costs of PS3 hardware, operating income decreased due to the change in the price of PS3 hardware.
Read the rest of the article at Seeking Alpha
No comments:
Post a Comment