Sony Music Entertainment (SME) posted a 50.3% increase in operating income to ¥30.3 billion ($285 million) in the fiscal third quarter, which ended Dec. 31, despite a 3.1% drop in sales to ¥
Sony Music Entertainment (SME) posted a 50.3% increase in operating income to ¥30.3 billion ($285 million) in the fiscal third quarter, which ended Dec. 31, despite a 3.1% drop in sales to ¥181.1 billion ($1.7 billion).
The company attributes the improvement in operating profit to a restructuring at Sony Music Entertainment Inc. (SMEI) that helped reduce overhead expenses, coupled with lower advertising and promotion costs at that unit and Sony Music Entertainment (Japan) (SMEJ).
The drop in sales at SME is apparently due to currency exchange rates. The company says its total worldwide music sales were up 6% on a local-currency basis.
Of total sales, SMEI accounts for 74%, or $1.26 billion. On a local-currency basis, that division -- which includes sales outside the U.S. -- enjoyed revenue growth of 6% during the quarter. This would indicate that U.S. sales declined during the period; SME did not break out those numbers. SMEJ, which accounted for $408.5 million of total third-quarter sales, showed an 8% revenue increase.
For the nine months to Dec. 31, SME had a 437% increase in operating income to ¥24.6 billion ($230 million). This includes a loss of ¥5.7 billion ($53.6 million) during the first quarter. Music revenues for the nine-month period dropped 6.5% to ¥425.8 billion ($4 billion).
Looking at overall corporate results, parent Sony Corp. reported third-quarter net income of ¥92.6 billion ($866 million) on sales of ¥2.32 trillion ($21.7 billion). The net income total is down 26.2% from the same period in 2002, while sales are up 0.7%.