Batteries Push Sony to Q2 Operating Loss

The global recall and replacement of millions of laptop batteries, and start-up costs for the PlayStation 3 console, pushed Sony's operations into the red for the July to September quarter, despite a jump in sales. The company reported an operating loss of ¥20.8 billion ($174.5 million) against an operating profit of ¥74.6 billion in the same period last year. The loss includes the estimated ¥51.2 billion that Sony will lose as a result of the laptop battery recall currently under way.

Sony's net income, which includes profit and loss from its core operations and subsidiaries, and other extraordinary items, dropped 94.1 percent to ¥1.7 billion. However, sales and operating revenue rose 8.3 percent to ¥1.85 trillion. The digital still camera business enjoyed a particularly strong quarter, with the DSC-T10 model proving popular with consumers. Sony's mobile phone joint venture with Telefonaktiebolaget LM Ericsson, Sony Ericsson Mobile Communications, also enjoyed record sales thanks in part to the popularity of its Walkman and Cybershot phones. In the motion picture sector the movie "Talladega Nights: The Ballad of Ricky Bobby" helped Sony Pictures Entertainment, Sony said.

The company's restructuring plan remains on track and has already achieved several of its goals, said Oneda. By the end of September the company had succeeded in achieving cost savings of ¥120 billion against its goal of ¥200 billion by the end of March 2008. Two manufacturing sites remain to be closed and it still needs to discontinue some products, but Sony has already laid off 10,100 staff, which is above its target of 10,000 staff.

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That's a very silly and short-sided comment. Don't you realize that competition is good for the entire tech industry (where many of us work) and the consumer (me and you)? Completion drives innovation (new products), efficiency (lower prices), and opens new markets (more potential profit).