TOKYO: Japanese electronics maker Sony Corp. posted a 5.3 per cent drop in its third quarter net profit as poor sales and high costs on account of the delayed launch of the company’s flagship PlayStation 3 video gaming console led to substantial losses in the unit.

Sony said net profit for the three months ended 31 December fell to 159.9 billion yen ($1.3 billion) from a record 168.9 billion yen in the year-earlier period and topping analysts’ prediction of 84.1 billion yen.

Revenue for the quarter gained 9.8 per cent to reach 2.61 trillion yen. The company witnessed a 17 per cent increase in the sales of consumer electronics items.

Operating profit — sales minus the cost of goods sold and administrative expenses — fell 15 per cent to 178.9 billion yen.

Despite a fall in profit, the company raised its forecasts for the year, saying it expected the annual net income to go up 38 per cent to 110 billion yen, with profit from the electronics business almost doubling.

Profit at the consumer electronics division reached 177.4 billion yen, as the Japanese yen weakened, the company said. Also, sales of Bravia TVs and Cyber-shot cameras helped in increasing the profit. The yen was about 5.1 per cent weaker against the dollar in the October-December quarter compared with a year earlier. A weaker yen increases the value of repatriated profits from the U.S. and Europe.

The games division, the company’s second largest unit in terms of revenue, lost 54.2 billion yen, compared with a profit of 67.8 billion yen a year earlier. The delay in production of PlayStation 3 and the price cutting the company had to resort to compete against rivals, led to this loss. The production costs of the device too went up with the company incorporating the Blu-ray high-definition optical disc drive and other technologies in the console.

The movie studio unit posted profit of 26.2 billion yen against a loss in the year-earlier period. Sony had a record 13 movies open at No 1 and movies like The Da Vinci Code and Casino Royale led in ticket sales during 2006. Its Spider-Man 3, due for release in May, is expected to help hike the profit.

Profit from financial services fell 46 per cent to 25.9 billion yen, while cell phone unit Sony Ericsson Mobile Communications Ltd. had 33.6 billion yen in profit.

The company’s shares fell 1.8 per cent to 5,630 yen in Tokyo.

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