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Music segment sales were $1,153 million, a decrease of 5.6% over a year ago, with an overall operating loss of $86 million, compared with an operating income of $37 million in the first quarter of the previous year.

SONY Q1 SALES UP, BUT MUSIC STRIKES SOUR NOTE

Media Conglom Sets Sales Mark, But Music Division Bleeds Red Ink

Spider-Man and DVD sales helped Sony to a record first quarter in sales, but the music division sputtered to an operating loss.

Sony’s consolidated sales for their first quarter, which ran from April through June ’02, increased 5.4% over a comparable period last year to $14 billion, the largest Q1 sales in its history. Operating income was $436 million, an increase of more than $400 million over last year. Income before taxes was $980 million compared to a loss of $120 million over a comparable period. Net income of $481 million was recorded after a net loss of $245 million last year.

The theatrical success of Spider-Man, which exceeded $675 million in worldwide box office receipts by the end of June, making it the highest-grossing film in the history of Sony's movie division, made a large contribution to the company's first quarter profitability.

Music segment sales were $1,153 million, a decrease of 5.6% over a year ago, with an overall operating loss of $86 million, compared with an operating income of $37 million in the first quarter of the previous year. The report attributed the drop on "a decline in album sales, costs incurred for the closure and consolidation of certain international distribution facilities and worldwide headcount reductions, and increased talent-related expenses." The company said aggressive worldwide restructuring and cost-reduction initiatives as well as an increased profit from manufacturing sales partially offset the increased loss.

Sony Music did sell a majority of its 50% equity interest in the Columbia House for $150 million and $67 million worth of notes to Blackstone Capital Partners (see hitsdailydouble.com, 5/14), resulting in a gain of $11 million. Sony/ATV also announced the purchase of Acuff-Rose publishing for $157 million in cash.

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