Revenue Slips at Sony

Revenue and operating income slumped at Sony (SNE) in its fiscal third quarter, as sagging sales of its PlayStation 2 and other electronics products weighed on results. But the electronics giant posted an improved bottom line, thanks to an accounting change.

Investors largely shrugged off the report, which came long before the opening bell on the New York Stock Exchange. In recent trading, Sony ADR's were off 22 cents, or 0.6%, to $36.72.

The declines in the company's results were largely expected. Last week, the company lowered its outlook on its full-year revenue and operating income, warning of falling prices on portable audio products, DVD recorders, televisions and other products.

In a statement, Sony Chairman and CEO Nobuyuki Idei warned that the company's results may not improve any time soon.

"Looking forward, we anticipate that the intense environment within the electronics industry is likely to continue," Idei said. "Sony reiterates its belief that strengthening the competitiveness of our electronics products is the most pressing issue facing our management today."

In the holiday quarter, Sony earned 143.8 billion yen, or 138.08 yen per share. That compared favorably to earnings of 92.6 billion yen, or 92.51 yen a share, in the year-earlier period.

But the company's sales fell 7.5% to 2.15 trillion yen year over year. And Sony's operating income plummeted 13% to 138.2 billion yen from the third quarter a year prior.

As noted in the company's updated guidance, in the third quarter Sony changed its outlook on its U.S. operations, based on an improvement in those operations results. Thanks to that changed outlook, the company was able to use in the quarter a higher portion of tax credits that it had generated from past losses of its U.S. businesses.