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Sony Profits Fall on TV Price Wars, Decline at Studio

Company's quarterly operating profit drops 5.9 percent despite gaming division boost

Sony's quarterly profits fell 5.9 percent during the fiscal third quarter, as the price wars among LCD television manufacturers and a lighter box office slate dragged down earnings.

Sony reported operating profit of 137.52 billion yen ($1.68 billion) during the October to December period, down from 146.1 billion yen last year. Net income was 72.3 billion yen ($886 million) compared to 79.2 billion yen in the same period last year.

At Sony Pictures, sales fell more than 26 percent (to 149 billion yen, or $1.84 billion) as the studio said “The Social Network” could not match its two box office hits (“2012” and Michael Jackson’s “This Is It”) during the same quarter last year. Sony Pictures profits ($58 million) declined more than 66 percent year-over-year, which the company blamed on a “loss recorded by lower-than-estimated theatrical performance” of “How Do You Know.”

Operating income for Sony's consumer products segment fell by nearly 50 percent, though the drop was offset by its the network products and service division, which includes video games like "Gran Turismo."

But the results still exceeded analysts' expectations for the company, and Sony chief Howard Stringer did not cut its profit forecast, though warned investors its annual revenue would come in about 3 percent lower (at 7.2 trillion yen) with lower-than-expected TV sales.