Sony Corporation today announced its consolidated results for the first quarter ended June 30, 2010 (April 1, 2010 to June 30, 2010).

• Operating income of 67.0 billion yen was recorded, a significant improvement over the loss recorded in the same quarter of the previous fiscal year.
• The Consumer, Professional & Devices and Networked Products & Services segments contributed significantly to the improved operating results.
• Net income attributable to Sony Corporation’s stockholders of 25.7 billion yen was recorded for the current quarter, compared to a net loss in the same quarter of the previous fiscal year.
• Forecasted operating income for the fiscal year has been revised upward, even though further appreciation of the yen against the euro is expected for the remainder of the fiscal year.

Consolidated Results for the First Quarter Ended June 30, 2010

Sales and operating revenue (“sales”) was 1,661.0 billion yen (18,663 million U.S. dollars), an increase of 3.8% compared to the same quarter of the previous fiscal year (“year-on-year”) primarily due to an increase in sales in the NPS and CPD segments, partially offset by factors including unfavorable exchange rates, and a decrease in revenue in the Financial Services segment resulting from a decline in the Japanese stock market.

During the quarter ended June 30, 2010, the average rate of the yen was 91.0 yen against the U.S. dollar and 115.5 yen against the euro, which was 5.8% and 13.5% higher, respectively, than the previous year’s first quarter.    On a local currency basis, sales increased 8% year-on-year.

Operating income was 67.0 billion yen (753 million U.S. dollars) as compared to an operating loss of 25.7 billion yen in the same quarter of the previous fiscal year.    This was mainly due to improved operating results in the CPD and NPS segments as a result of an improvement in the cost of sales ratio and an increase in gross profit from higher sales.    Excluding equity in net income (loss) of affiliated companies and restructuring charges, operating income on an as adjusted basis increased by 44.2 billion yen to 67.5 billion yen (758 million U.S. dollars) year-on-year.

Equity in net income of affiliated companies, recorded within operating income, was 6.7 billion yen (75 million U.S. dollars) as compared to a loss of 15.1 billion yen in the same quarter of the previous fiscal year.    Sony recorded equity in net income for Sony Ericsson of 0.6 billion yen (7 million U.S. dollars) compared to equity in net loss of 14.5 billion yen in the same quarter of the previous fiscal year.

Equity in net income for S-LCD was 4.5 billion yen (50 million U.S. dollars) as compared to a loss of 1.8 billion yen in the same quarter of the previous fiscal year.

The net effect of other income and expenses was income of 11.9 billion yen (134 million U.S. dollars), an improvement of 19.1 billion yen year-on-year, primarily due to the recording of a net foreign exchange gain in the current quarter versus a net foreign exchange loss in the same quarter of the previous fiscal year.

Income before income taxes of 78.9 billion yen (887 million U.S. dollars) was recorded as compared to a loss of 32.9 billion yen in the same quarter of the previous fiscal year.

Income taxes: During the first quarter of the current fiscal year, Sony recorded 43.7 billion yen (491 million U.S. dollars) of income taxes, resulting in an effective tax rate of 55.3%.    The effective tax rate was higher than the Japanese statutory tax rate mainly because Sony revised its estimate of the final outcome of the Bilateral Advance Pricing Agreements related to Sony’s intercompany transfer pricing based on the most recent government to government negotiations.    Sony believes that the more likely than not outcome will reallocate profits and losses between Sony Corporation and its foreign subsidiaries and, therefore, additional tax expenses were recorded.

Net income attributable to Sony Corporation’s stockholders, which excludes net income attributable to noncontrolling interests, was 25.7 billion yen (289 million U.S. dollars) as compared to a net loss of 37.1 billion yen in the same quarter of the previous fiscal year.

Consumer, Professional & Devices:

Sales increased 7.0% year-on-year (a 12% increase on a local currency basis) to 889.5 billion yen (9,994 million U.S. dollars). Sales to outside customers increased 8.9% year-on-year.

This was primarily due to an increase in television sales resulting from increased unit sales of LCD televisions.

Operating income of 50.1 billion yen (563 million U.S. dollars) was recorded in the current quarter, compared to a loss of 8.9 billion yen in the same quarter of the previous fiscal year.    This was driven primarily by an improvement in the cost of sales ratio, an increase in gross profit due to higher sales and a decrease in restructuring charges.

These factors were partially offset by an increase in selling, general and administrative expenses primarily associated with the higher sales and unfavorable foreign currency exchange rates.    Restructuring charges were 3.9 billion yen (44 million U.S. dollars) in the current quarter, compared with 23.5 billion yen recorded in the same quarter of the previous fiscal year.    Categories contributing to the improvement in operating results (excluding restructuring charges) include semiconductors, reflecting an increase in sales of imaging sensors, and televisions, reflecting the increase in sales.

FOR THE FULL REPORT, PLEASE REFER TO: http://www.sony.net/SonyInfo/IR/financial/fr/index.html