Sony third-quarter profits up 9.6%

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TOKYO -- Sony announced its third-quarter results Thursday in Tokyo with sales and revenue up 9.6% on a stronger showing from its electronics and gaming divisions, despite a poor performance from Sony Pictures.

Worldwide sales and operating revenue topped $25 billion while income before taxes increased 60% to $2.5 billion, largely due to income from the IPO of Sony Financial Holdings.

Operating income at Sony Pictures nearly halved year over year to $1.96 billion, due to reduced sales in both theatrical and television markets.

"There were no blockbusters in the quarter like 'Casino Royale' or 'The Pursuit of Happyness' in the same period the year before," said Nobuyuki Oneda, executive vp and CFO, "the release of 'Spider-Man 3' and 'Superbad' helped the home entertainment division, but overall results were down."

In the gaming division, sales and operating income were up 31.2% with 4.9 million PlayStation 3 consoles sold, an increase of 3.2 million for the same period in 2006. Sales of games for the PS3 were up 391% to 26 million titles.

Although sales of the PlayStation 2 dropped by 1.35 million over the same period of last year, it beat forecasts and still outsold the PS3 with 5.4 million consoles shifted, maintaining its position as the best selling game console of all time.

Sales of the PlayStation Portable were up by 1.1 million units to 5.8 million, though game sales for the console fell by 3 million to 18 million.

Despite the improved games performance, the division was still in the red due to the loss Sony incurs on each unit of the PS3 it sells.

"We have reduced losses on the PS3 due to production cost-savings but don't expect the game division to become profitable until the second half of the next fiscal year," Oneda said.

Sales at Sony BMG Music Entertainment were flat year over year despite a decline in the worldwide music market, thanks to strong sales of albums by Alicia Keys, Celine Dion, Carrie Underwood and Leona Lewis.

Oneda refused to comment on a question asking about reports that Sony had paid a large amount of money to Warner Bros. to secure its recent switch to supporting the Blu-ray format exclusively.
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