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Sales at Sony's music division rose 11% to $1.5 billion, helped by higher sales in Europe and the benefits of efforts to cut costs.
SONY PROFITS BETTER
THAN EXPECTED
Income Drops but Company Benefits From Weak Yen, Rise in Music Sales
Sony Corp. said that its fiscal third-quarter profit fell less than expected as the firm benefited from a weaker yen, a surge in PlayStation 2 sales and an 11% increase in music sales.

Net income fell 14% to $475 million, or 48 cents a share, in the three months ended Dec. 31.

Sales at Sony's music division rose 11% to $1.5 billion, helped by higher sales in Europe and the benefits of efforts to cut costs. Sales at the movie division rose 12% to $1.2 billion. The company's movie division eked out a profit compared with a loss in the year-ago period. Operating profit was $2 million.

Sony sold 5 million PlayStation 2 consoles in December, leading a 7% surge in sales to a record $17 billion and prompting the company to raise its sales and operating profit forecasts for the year. The weaker yen helped the electronics business, which makes Wega televisions and Mavica digital cameras, post its first profit in four quarters. Third-quarter net income was higher than the average $290 million profit forecast by analysts.

The company raised its annual sales forecast to $56.1 million and boosted by almost a tenth its outlook for operating profit—the amount left after manufacturing, selling and administrative expenses are subtracted from sales—$968 million.

Sony attributed the increases to the effect of the weaker Japanese currency, which raises the value of Sony's overseas sales when converted back to yen. A 1-yen decline against the dollar boosts Sony's yearly operating profit by $60 million, the company said.

In the third quarter, PlayStation 2 shipments almost doubled to 5.42 million units compared with a year ago, contributing to an operating profit of $494 million as sales at the company's game business soared 63% to $2.8 billion.

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