2005 Earnings business call Transcript Paul Smith Bags Sale SNE Good day ladies and gentlemen and welcome to the sony corporation third quarter 2005 earnings business call.My name is amery and i be your advisor for today.Right, all players are in a listen only mode.We will be aiding a question and answer session, towards the end of today conference if whenever we want during the call, you require assistance please press by and our coordinator will be happy to work with you.I now like to turn the discussion over to mr.Jonathan bates, with investor interaction in tokyo.You are encouraged to proceed please. Jonathan bates, investor associations Thanks to you for that introduction thank you all for joining us today january 26, 2006, for the discussion of sony recent most current listings for the third quarter ended december 31, 2006.I am jonathan bates with sony investor relationships in tokyo.We are joined today by takao yuhara, corporate business and svp, investor interaction, sony partnership and by robertWiesenthal, group government, using corporate development and m sony corporation, evp and simply cfo, sony association of america.Thanks to you for joining us today mr.Yuhara and moreover mr.Wiesenthal. In just a few moments i going to give brief summary of today press releases.That is when mr.Yuhara in addition mr.Wiesenthal will be available to answer to questions.Please be aware that statements made during the following remarks and q session regarding sony current plans, rates, strategies and release and other statements which aren't historical facts are forward looking statement about the future performance of sony. These statements matched to management assumption.In light of the information you can buy to us and therefore we should not place undue reliance on them.Sony cautions you that the number the critical indicators could cause actual results to differ materially from those discussed in the forward looking statements.Start, i am now going to turn to our bulletins. Thanks to the strong performance of the electronics and games segment during the yearend sales season including strong sales of bravia lcd tvs in all region in addition to the strong revenue contribution of the financial services segment, sony achieved record quarterly combined sale of billion and recorded quarterly combined net income of billion.Combined operating income was billion, the next to the highest after the december 1997 quarter, it is many people. The income before taxes was billion, improve of 51.4% annually.The increase was primarily driven due to a gain of billion on the change of interest caused by the ipo of sony communication network corporation.Associated net gain of affiliated company was billion, improve billion year on year.Sony bmg fork out billion, sony ericsson billion dollars and slcd thousand. As a result of this strong quarterly features, we have revised upward our outlook to the march 2006 fiscal year, the principle reason for this revision who have won a weaker yen in can be quarter than we had originally anticipated and 2)Better than expected operating results in the electronics captive market and financial services segment during the third quarter. In the electronics, the tv business performed significantly better than anticipated due to the prosperity of bravia lcd tvs and the pc business was also better than forecasted.Although, the performance of years into the future segment was lower than expected.Although problem of the had a positive effect on operating results during the third quarter, sony continued to operate in an uncertain global business conditions during the fourth quarter.In addition to that, to this version, to the, in our forecast sony today announced a progress report on our structural reform activities which are proceeding in order to plan.And these folks were outlined at our corporate strategy meeting last september. Sales in the electronics industries segments increased 4.7% while carrying out work income increased 56% to billion, Mainly to an improvement in the cost of sales ratio related strengthened products appeal and cost reduction.Sales of your audio, video tv and information and marketing category in aggregates increased 2% while operating income increased billion.Sales increased primarily due to the potency of bravia, the success that which has propelled sony to the primary in the worldwide lcd tv market by sales amount based on sony data. Utilizing income increased, strong note, pc inside of, vaio pc corporation.The increased sales of dvd and hi-Def camcorder models and strong sales of hd broadcast equipments.Sales of semiconductors and elements increased 22%, while doing work income increased billion.Both increases are due to higher sales of semiconductors, to the match business, to prevent heads for the, for playstation portable, lithium ion strength for notebook pcs and memory chips. Sales amongst gamers segment increased 48% year on year, reflecting a large increased sales of both hardware and software.The ps2 continued to perform well and the psp continued its growth as all the time penetrating game console in history.Software sales grew to the side of the bargain psp software, although we continued to invest aggressively in ps3 research and developments and sg expenses offer increased primarily due to a rise in marketing expenses, the steady global expansion of the psp platform and continued strong performance of the ps2 business enabled us to maximize operating income, 52% to billion dollars. Picture part sales, in pound, was flat year on year that refused 10% on us dollar basis.This decrease in revenue was the result of the significant home theatre contribution of spiderman ii in the prior year third quarter, and the under performance of the legend of zorro and the zathura in the modern quarter.An operating loss of billion was recorded in comparison profit in the prior year due to these same factors. Financial services revenue amplified 31% year on year, mainly due to a rise in revenue at sony life.And utilizing income for the segment grew billion, mainly due to improvement in gains Paul Smith Outlet UK and losses on investments in the final accounts at sony life, primarily caused by an improvement and evaluation gains from stock convergence right in convertible bonds. Before i finish, product sales in the other segments increased by 8%, as consequence of strong sales at several businesses within the segments, revenue at smej which composes 40% of the other segment sales increased year on year due to the achievements of first hit by the ken hirai album.Making use of income also increased to 14.9 billion via cost reductions at network related businesses within Sony Corporation.And an easier cost of sales ratio and higher sales at smej. This ends my opening remarks, with this i would now like to turn you over to our operator.Thanks to you. Say thanks a ton, there.Ladies and gentlemen the employees ask a question, please press associated with on your touchtone phone.If your question has been answered or you want to withdraw your question, please press followed by again it is if you do wish to ask a question and will pause as it were as question queue up. Good, so while we are waiting for few live inquiries to queue up, why don we take a couple of email challenges first?The initial question is a question about crt television.How big in value terms are crt tvs associated with tv sales in q3 2005.For panic disorder this question, i would choose go over to mr.Yuhara Without http://www.ed5.co.uk/ a doubt, a direct response to this question.Using this, the solid spread, the sales of the tv segment was billion and crt tv is sales for along 20% of it. Thanks to you mr.Yuhara. Second email dilemma, have you got assumptions for the lcd tv market in 2006, as an example, rate of growth and market size worldwide in million units? Acceptable, as soon, the lcd tv market becomes manifest pretty quickly growing market and this year, there are approximately 20 million uniform sales in the worldwide division.And in batch that we get in 2006, enthusiastic about increased by another 80% so that 3.8 million.So that has to be anticipated the lcd tv market in quantity. Thanks to you, mister.Yuhara.Bring back operator, i like to go with very first live question. Say a big heads up, friend.Your first live question will range from line jason mauricio with arete.Please go along. That's right, hello, a couple of quick questions could you maybe give some more discourse around the tv operating profits excluding the currency effect, by an in country money? Fine, and now we don't;Disclose pretty, the forex trading, the switch, the benefits in the usa volume base.But risk, inside of solid growth, there was about billion relative your rest on that, the transaction, you got that, the in order to that, solid quarter all indicates, remain quarter.It really is a, the advantages of the, on the ericsson succession. O.K, quick question on personal economic services, the main benefit into our sales and operating profit this quarter seems to include some one time effect, but should we expect that to show, return to stabilized levels in future quarters? Specific, throughout the, this financial services specifically in the sony life, there is a burier on profits of the protection investment, mainly combats we really wish for.This was the rise, thanks to that tokyo stock market, even more topics.And i thought he did this the largely imposed in that, sony life revenue in second quarter. Good am, a handful of question for you, would you by any chance give us any update on the timing of playstation 3, what your ideas are with that that console system.What i'm saying is, secondly checking games business, could you give us a breakdown on a geographic basis on hardware and software units for both playstation 2 and playstation portable during can be quarter.
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